At January 1, 2013, the accounting records of Gingers Boutique had the following balances: Cash ............... $

At January 1, 2013, the accounting records of Ginger’s Boutique had the following balances:

Cash ............... $ 1,000

Inventory ....... 2,250 (150 units @ $15)

Common stock ............. 2,000

Retained Earnings ........... 1,250

During January, Ginger’s Boutique entered into five cash transactions:

1. Purchased 120 units of inventory @ 16 each.

2. Purchased 160 units of inventory @ 17 each.

3. Sold 330 units of inventory @ $30 each.

4. Incurred $1,700 of operating expenses.

5. Paid income tax at the rate of 30 percent of income before taxes.

Required:

a. Set up rows 1 thought 10 of the following spreadsheet to compute cost of goods sold and ending inventory, assuming (1) FIFO, (2) LIFO, and (3) weighted-Average cost flows. Notice that the FIFO cost flow has already been completed for you. Use columns o through W to complete the LIFO and weighted-average cost flow computations. Be sure to use formulas for all calculations.

b. In rows 13 through 31, compute the amount of net income and net cash flow from operations under FIFO, LIFO and weighted average. The FIFO column has been provided as anexample.

Transcribed Image Text:

Cost of Goeds Available For Sale BEOFoding Inventery EIEQ Cost oef Gonds Sal Unt Tote Pri Saat Uni Unit Tot degnning Iventary First Parchase (cast Secont Purchase (cash) Toal Cost f Goads Awalable for Sale 4306 0$16$2,20 20 $16 $1.520 160 $17 s2.720 890 100 $15 $220 120 $16 $1 320 100 $12 $1 -00 S17 $1020 5190 100 WEIGHTED Income Statements EIEQ LIEQ AVE RAGE Sales 030 unts $30eac (cath) 30 Cost of Goods Sol (ch) 1700 3010 Operating Experses ncome Bafhre Taxe Income Tax Epense CO%) Net Incom (cash) Statenent of Cash Flows FIFO Cach receied from Customere $9.900 Cash pad for inwntory Puchased 640) Cash pad for Operating Experses (,700 Cash pad for Income Tax NtCash Flow romCperaing Actitis 2667 Beginning Cash Endng Cash