130 44 48 490 Chapter 6 - Homework Assignment Problem One: During the year. Masks R Us Corporation has the following inventory transactions Date Transaction Number of Units Unit Cost Total Cost Jan. I Beginning inventory 50 542 $ 2.100 Apr. 7 Purchase 5,720 Jul. 16 Purchase 200 47 9,400 Oct. 6 Purchase 110 5.280 $22.500 For the entire year, the company sells 440 units of inventory for $60 each. Required: 1. Using FIFO, calculate (a) ending inventory. (b) cost of goods sold. (c) sales revenue, and (d) gross profit. a) Ending Inventory b) CGS c) Sales Revenue d) Gross Profit 2. Using LIFO, calculate (a) ending inventory. (b) cost of goods sold, (e) sales revenue, and (d) gross profit. a) Ending Inventory b) CGS c) Sales Revenue d) Gross Profit 3. Using weighted average cost, calculate (a) ending inventory, (b) cost of goods sold. (c) sales revenue, and (d) gross profit a) Ending Inventory b) CGS c) Sales Revenue d) Gross Profit 4. Determine which method will result in higher profitability when inventory costs are rising, Problem Two: JC Bikes has the following transactions during May. 1. Analyze and record the transactions of JC Bikes, assuming the company uses a perpetual inventory system May 2 Purchases bikes on account from Bikers R Us Wholesale for $3,300, terms 1/10, n/30. 1 R E NI SE Account DR CR May 3 Pays cash for freight costs of $200 on bikes purchased from BRU. SE ENI CF Account DR CR May 5 Returns bikes with a cost of $400 to BRU because part of the order is incorrect. SE CF Account NI DR CR May 10 Pays the full amount due to BRU. A L SE R E NI CF Account DR CR May 30 Sells all Bikes purchased on May 2 (less those returned on May 5) for $4,000 on account. SE R E NI CF Account DR CR 2. Assume that payment to BRU is made on May 24 instead of May 10. Record this payment. SE E NI Account DR CR