Horngren's Accounting (12th Edition)
12th Edition
ISBN: 9780134486444
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 6, Problem E6.15E
Comparing inventory methods
Learning Objective 2
- Ending Merch. Inv. $16.30
Nov. 2 Purchased 11 gallons @ $2.15 each 6 Purchases 2 gallons @ $2.80 each 8 Sold 6 gallons of milk to a customer 13 Purchases 3 gallons @ $2.85 each 14 Sold 4 gallons of milk to a customer
Requirements
- Determine the amount that would be reported in ending merchandise inventory on November 15 using the FIFO inventory costing method.
- Determine the amount that would be reported in ending merchandise inventory on November 15 using the LIFO inventory costing method.
- Determine the amount that would be reported in ending merchandise inventory on November 15 using the weighted-average inventory costing method. Round all amounts to the nearest cent.
Use the following information to answer Exercises E6-16 through E6-18
Golf Unlimited carries an inventory of putters and other golf clubs. The sales price of each putter is $119. Company records indicate the following for a particular line of Golf Unlimited’s putters:
| Date | Item | Quantity | Unit Cost |
| Nov. 1 | Balance | 24 | $ 53 |
| 6 | Sale | 20 | |
| 8 | Purchase | 30 | 70 |
| 17 | Sale | 30 | |
| 30 | Sale | 2 |
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7:25SW YO
□
Learning Objectives 2, 3
2. Ending Merch. Inv. $73
Dec. 1 Beginning merchandise inventory
Assume that Toys Galore store bought and sold a line of dolls during December
as follows:
8 Sale
14 Purchase
21 Sale
QAA
C
363/ 1480
13 units @ $9 each
8 units @ $ 22 each
16 units @ $ 14 each
5G 71%
14 units @ $22 each
Requirements
1. Compute the cost of goods sold, cost of ending merchandise inventory,
and gross profit using the FIFO inventory costing method.
2. Compute the cost of goods sold, cost of ending merchandise inventory,
and gross profit using the LIFO inventory costing method.
3. Which method results in a higher cost of goods sold?
4. Which method results in a higher cost of ending merchandise inventory?
5. Which method results in a higher gross profit?
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Required information
Skip to question
Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. Also, on December 15, Monson sells 27 units for $20 each.
Purchases on December 7
17 units @ $8.00 cost
Purchases on December 14
34 units @ $12.00 cost
Purchases on December 21
27 units @ $14.00 cost
Required:Monson sells 27 units for $20 each on December 15. Of the units sold, 14 are from the December 7 purchase and 13 are from the December 14 purchase. Monson uses a perpetual inventory system. Determine the costs assigned to the December 31 ending inventory when costs are assigned based on specific identification.
Specific Identification—Perpetual:
Goods purchased
Cost of Goods Sold
Inventory Balance
Date
# of units
Cost per unit
# of units sold
Cost per unit
Cost of Goods Sold
# of units
Cost per unit
Inventory Balance
December 7…
7:28S W
□
e6-20
Learning Objectives 2, 3
1. COGS $2,140
⠀⠀⠀
Assume that AB Tire Store completed the following perpetual inventory
transactions for a line of tires:
May 1 Beginning merchandise inventory
11
Purchase
23 Sale
26 Purchase
29 Sale
QAA
C
16 tires @ $65 each
363/ 1480
10 tires @ $78 each
12 tires @ $88 each
14 tires @ $ 80 each
Requirements
1. Compute cost of goods sold and gross profit using the FIFO inventory
costing method.
18 tires @ $ 88 each
5G 70%
Ę
2. Compute cost of goods sold and gross profit using the LIFO inventory
costing method.
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Chapter 6 Solutions
Horngren's Accounting (12th Edition)
Ch. 6 - Which principle or concept states that business...Ch. 6 - Which inventory costing method assigns to ending...Ch. 6 - Assume Nile.com began April with 14 units of...Ch. 6 - Suppose Nile.com used the weighted-average...Ch. 6 - Which inventory costing method results in the...Ch. 6 - Which of the following is most closely linked to...Ch. 6 - At December 31, 2018, Stevenson Company overstated...Ch. 6 - Suppose Maestro’s had cost of goods sold during...Ch. 6 - Suppose used the LIFO inventory costing method and...Ch. 6 - Prob. 1RQ
Ch. 6 - Prob. 2RQCh. 6 - Prob. 3RQCh. 6 - Prob. 4RQCh. 6 - Discuss some measures that should be taken to...Ch. 6 - Under a perpetual inventory system, what are the...Ch. 6 - When using a perpetual inventory system and the...Ch. 6 - During periods of rising costs, which inventory...Ch. 6 - What does the lower-of-cost-or market (LCM) rule...Ch. 6 - What account is debited when recording the...Ch. 6 - What is the effect on cost of goods sold, gross...Ch. 6 - When does an inventory error cancel out, and why?Ch. 6 - How is inventory turnover calculated, and what it...Ch. 6 - How is days’ sales inventory calculated, and what...Ch. 6 - When using the periodic inventory system, which...Ch. 6 - When using periodic inventory system and...Ch. 6 - Determining inventory accounting principles...Ch. 6 - Determining inventory costing methods Learning...Ch. 6 - Preparing a perpetual Inventory record and journal...Ch. 6 - Preparing a perpetual inventor, record and journal...Ch. 6 - Preparing a perpetual inventor record and journal...Ch. 6 - Preparing a perpetual inventory record and journal...Ch. 6 - Comparing Cost of Goods Sold under FIFO, LIFO, and...Ch. 6 - Applying the lower-of-cost-or-market rule Learning...Ch. 6 - Determining the effect of an inventory error...Ch. 6 - Computing the rate of inventory turnover and days’...Ch. 6 - Computing periodic inventory amounts—FIFO Learning...Ch. 6 - Computing periodic inventory amounts—LIFO Learning...Ch. 6 - Computing periodic inventory...Ch. 6 - Using accounting vocabulary Learning Objective 1,...Ch. 6 - Comparing inventory methods Learning Objective 2...Ch. 6 - Measuring and journalizing merchandise inventory...Ch. 6 - Measuring and journalizing merchandise inventory...Ch. 6 - Measuring ending inventory and cost of goods sold...Ch. 6 - Comparing amounts for cost of goods sold, ending...Ch. 6 - Comparing cost of goods sold and gross...Ch. 6 - Applying the lower-of-cost-or-market rule to...Ch. 6 - Applying the lower-of-cost-or-market rule to...Ch. 6 - Measuring the effect of an inventory error...Ch. 6 - Correcting an inventory error-two years Learning...Ch. 6 - Computing inventory turnover and days’ sales in...Ch. 6 - Comparing ending merchandise inventory, cost of...Ch. 6 - Computing periodic inventory amounts Learning...Ch. 6 - Accounting for inventory using the perpetual...Ch. 6 - Accounting for inventory using the perpetual...Ch. 6 - Accounting principles for inventory and applying...Ch. 6 - Prob. P6.31APGACh. 6 - Prob. P6A.32APGACh. 6 - Prob. P6.33BPGBCh. 6 - Prob. P6.34BPGBCh. 6 - Accounting principles for inventory and applying...Ch. 6 - Prob. P6.36BPGBCh. 6 - Prob. P6A.37BPGBCh. 6 - Prob. P6.38CTCh. 6 - Prob. P6.39CPCh. 6 - Prob. P6.40PSCh. 6 - Prob. 1CPCh. 6 - Prob. 2CPCh. 6 - Prob. 3CPCh. 6 - Prob. 4CPCh. 6 - Prob. 5CPCh. 6 - Prob. 6CPCh. 6 - Prob. 7CPCh. 6 - Prob. 8CPCh. 6 - Prob. 9CPCh. 6 - Prob. 10CPCh. 6 - Prob. 11CPCh. 6 - Prob. 6.1TIATCCh. 6 - Prob. 6.1DCCh. 6 - Prob. 6.1FSC
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