On number 1, on FIFO, letter (a), on cost of good sold.. how do i get 600 units ? when i have to multiply that by $27.

ACC 101 Chapter 7 1. award: 8 out of 8 points -2-2 http://ezto.mhhm. The following are the transactions for the month of July. July 1 July 5 July 13 July 17 July 25 July 27 Units 2,000 1,100 6,300 Beginning Inventory Sold Purchased Sold Purchased Sold Unit cost $ 19 22 2,900 8,000 4,900 27 Required: Calculate the cost of goods available for sale, ending inventory, and cost of goods sold, if Aircard uses (a) FIFO, (b) LIFO, or (c) weighted average cost. Assume a periodic inventory system is used. (Input all amounts as positive values. Round Weighted average cost per unit to 2 decimal places. Round your final answers to the nearest dollar amount. Omit $ sign in your response.) FIFO Weighted Average LIFO Cost of Goods available for sale $ 392,600 $ 392,600 $ 392,600 Ending inventory Cost of goods sold $ $ 199,800 192,800 $ $ 156,800 235,800 $ $ 178,266 214,401 Explanation: Goods available for sale: All methods Beginning inventory Next units in (7/13purchase) Next units in (7/25 purchase) Units Unit Cost 2,000 $19 Total Cost $ 38,000 6,300 22 138,600 8,000 27 216,000 Goods available for sale 16,300 $ 392,600 Ending inventory and cost of goods sold: a.First-in, first-out: Ending (7,400 $27) Inventory Cost of goods (2,000 $19) sold (6,300 units $22) (600 units $27) b Last-in, first-out: . Ending (2,000 units Inventory $19) (5,400 units $22) Cost of goods sold (8,000 units $27) (900 units $22) $ 199,800 $ 192,800 $ 156,800 $ 235,800 c Weighted-average cost: . Average unit cost $392,600 16,300 = $24.09 per unit (7,400 units Ending inventory $ $24.09) Cost of goods sold (8,900 units x $ 24.09) $ 178,266 214,401 To double-check calculations, use the CGS equation as follows: Beginning inventory + Purchases $ = Cost of Goods Available for Sale - Ending inventory FIFO LIFO WAC 38,000 $ 38,000 $ 38,000 354,600 354,600 354,600 392,600 199,800 = Cost of Goods Sold 392,600 156,800 392,600 178,266 $ 192,800 $ 235,800 $ 214,401 ____________________________________________________ 2. award: 8 out of 8 points -2-2 http://ezto.mhhm. In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought merchandise in the following order: (1) 289 units at $8 on January 1, (2) 389 units at $9 on January 8, and (3) 589 units at $10 on January 29. Assume 800 units are on hand at the end of the month. Required: Calculate the cost of goods available for sale, ending inventory, and cost of goods sold under the (a) FIFO, (b) LIFO, and (c) weighted average cost flow assumptions. Assume a periodic inventory system is used. (Input all amounts as positive values. Round Weighted average cost per unit to 2 decimal places. Round your final answers to the nearest dollar amount. Omit $ sign in your response.) Goods Available for Sale Cost of goods sold Ending inventory Explanation: $ $ $ FIFO 11,703 3,914 7,789 $ $ $ LIFO 11,703 4,670 7,033 $ $ $ Weighted Average 11,703 4,315 7,392 Goods available for sale: All methods Unit Cost 289 $ 8 389 9 589 10 Units First units in (January 1) Next units in (January 8) Next units in (January 29) Total Cost $ 1,267 2,312 3,501 5,890 11,703 Cost of goods sold and ending inventory: a.First-in, first-out: Cost of goods (289 units x sold $8) (178 units x $9) Ending Inventory (589 units x $10) (211 units x $9) b Last-in, first-out: . Cost of (467 units x goods sold $10) Ending Inventory (289 units x $8) (389 units x $9) (122 units x $10) $ 3,914 $ 7,789 $ 4,670 $ 7,033 c Weighted-average cost: . Average unit cost $11,703 1,267 = $9.24 (467 units x Cost of goods sold $9.24) $ 4,315 (800 units x $9.24) Ending inventory $ 7,392 To double-check calculations, use the CGS equation as follows: FIFO Beginning inventory + Purchases $ LIFO 0 11,703 = Cost of Goods Available for Sale - Ending inventory $ 11,703 7,789 = Cost of Goods Sold $ 0 11,703 WAC $ 11,703 7,033 3,914 $ 4,670 0 11,703 11,703 7,392 $ 4,315 _________________________________________ 3. award: 7 out of 7 points -2-2 http://ezto.mhhm. The Jewel Fool had the following inventory items on hand at the end of the year. Necklaces Bracelets Quantity 54 37 Replacement Cost per Item Cost per item $84 63 $48 45 Required: Determine the lower of cost or market per unit and the total amount that should be reported on the balance sheet for each item of inventory. (Omit the "$" sign in your response.) Necklaces Bracelets Total Lower of cost or market $ 48 45 Total reported $ 2,592 $ 1,665 $ 4,257 Explanation: Cost per Replacement item cost per item $ 54 $ 84 37 63 Necklaces Bracelets Lower of cost or market Quantity $ 48 48 45 45 Total reported 54 $48 = $ 2,592 37 $45 = $ 1,665 Total $ 4,257 ____________________________________________________ 4. award: 7 out of 7 points -2-2 http://ezto.mhhm. Inventory at the beginning of the year cost $14,200. During the year, the company purchased (on account) inventory costing $59,000. Inventory that had cost $54,000 was sold on account for $81,000. At the end of the year, inventory was counted and its cost was determined to be $19,200. (a) Calculate the cost of goods sold. (Omit the "$" sign in your response.) Cost of goods sold $ 54,000 (b) What was the gross profit? (Omit the "$" sign in your response.) Gross profit $ 27,000 (c) Prepare journal entries to record these transactions, assuming a perpetual inventory system is used. (Record the journal entries in the order given in question. Omit the "$" sign in your response.) General journal Inventory Accounts payable Debit 59,000 Credit 59,000 Accounts receivable Sales revenue 81,000 Cost of goods sold Inventory 54,000 81,000 54,000 Explanation: Beginning Inventory Purchases $ + 14,200 59,000 Cost of Goods Sold - 54,000 Ending Inventory $ 19,200 Sales Revenue Cost of Goods Sold $ 81,000 (54,000) Gross Profit $ 27,000 5. award: 7 out of 7 points -2-2 http://ezto.mhhm. Supply the missing dollar amounts for the income statement of Lewis Retailers for each of the following independent cases (Input all amounts as positive values. Omit the "$" sign in your response): Sales Revenue Beginning Inventory Purchases A $ 700 $ 106 $ 704 B 855 221 766 987 542 875 159 416 580 575 269 315 780 210 Cases C D 200 Total Available $ 810 Ending Inventory $ 515 Cost of Goods Sold $ 295 Gross Profit $ 405 Selling and General Expenses $ 200 718 260 137 282 137 570 305 Income from Operations 205 168 ____________________________________________________ 6. award: 7 out of 7 points -2-2 http://ezto.mhhm. $ 205 0 114 100 Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki's records show the following for the month of January. Sales totaled 128 units. Beginning Inventory Purchase Purchase Date January 1 January 15 January 24 Units Unit Cost Total Cost 65 $10 $ 650 218 11 2,398 91 12 1,092 Requirement 1: Calculate the number and cost of goods available for sale. (Omit the "$" sign in your response.) 374 $ 4,140 Number of goods for sale Cost of goods for sale units Requirement 2: Calculate the number of units in ending inventory. Ending inventory Requirement 3: 246 units Calculate the cost of ending inventory and cost of goods sold using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods. (Round Weighted average cost per unit to two decimal places and final answers to the nearest dollar amount. Omit the "$" sign in your response.) FIFO LIFO Weighted Average Ending inventory $ 2,797 $ 2,641 $ 2,723 Cost of goods sold $ 1,343 $ 1,499 $ 1,417 Explanation: (1) Beginning Inventory + Purchase + Purchase Goods Available for Sale 10 $ 218 units 11 $ 91 units 12 $ 65 units 374 units $ 650 2,398 1,092 $ 4,140 (2) Units in Ending Inventory = Units Available - Units Sold = 374 - 128 = 246 units. (3) FIFO Goods Available for Sale - Ending Inventory (LIST) (91 $12) + (155 $11) $ 4,140 2,797 Cost of Goods Sold (FIFO) (65 $10) + (63 $11) $ 1,343 LIFO Goods Available for Sale - Ending Inventory (FIST) (65 $10) + (181 $11) $ 4,140 2,641 Cost of Goods Sold (LIFO) (91 $12) + (37 $11) $ 1,499 $ 4,140 Weighted average unit cost: = $ 11.07 per unit 374 units Weighted Average Goods Available for Sale - Ending Inventory (246 $11.07) $ 4,140 2,723 Cost of Goods Sold (128 $11.07) $ 1,417 ____________________________________________________ 7. award: 7 out of 7 points -2-2 http://ezto.mhhm. Scoresby Inc. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31, 2010. Transactions Units Unit Cost a. Inventory, December 31, 2009 For the year 2010: b. Purchase, March 5 c. Purchase, September 19 d. Sale, April 15 (sold for $32 per unit) e. Sale, October 31 (sold for $34 per unit) f. Operating expenses (excluding income tax expense), $241,000 3,700 $5 10,200 3,500 3,300 7,200 6 8 Requirement 1: Calculate the number and cost of goods available for sale. (Omit the "$" sign in your response.) Number of goods for sale 17,400 Cost of goods for sale $ 107,700 Requirement 2: Calculate the number of units in ending inventory. Ending inventory 6,900 units Requirement 3: units Compute the cost of ending inventory and cost of goods sold under (a) FIFO, (b) LIFO, and (c) weighted average cost. (Round Weighted average cost per unit to two decimal places and final answers to the nearest dollar amount. Omit the "$" sign in your response.) FIFO LIFO Weighted Average Ending inventory $ 48,400 $ 37,700 $ 42,711 Cost of goods sold $ 59,300 $ 70,000 $ 64,995 Requirement 4: Prepare an income statement that shows 2010 amounts under the FIFO method, LIFO method and weighted average method. (Round Weighted average cost per unit to two decimal places and final answers to the nearest dollar amount. Input all amounts as positive values, except for Loss from Operations. Omit the "$" sign in your response.) SCORESBY INC. Income Statement For the Year Ended December 31, 2010 FIFO $ 350,400 59,300 LIFO $ 350,400 70,000 Weighted Average $ 350,400 64,995 Gross profit Operating expenses 291,100 241,000 280,400 241,000 285,405 241,000 Income (Loss) from Operations $ 50,100 $ 39,400 $ 44,405 Sales revenue Cost of goods sold Requirement 6: Which inventory costing method may be preferred by Scoresby for income tax purposes? LIFO Explanation: 1: Beginning Inventory + Purchase + Purchase 3,700 units $ 5 10,200 units $ 6 3,500 units $ 8 $ 18,500 61,200 28,000 17,400 units $ 107,700 Goods Available for Sale 2: Ending Inventory Units = Units Available - Units Sold = 17,400 - 10,500 = 6,900 units. 3: FIFO Goods Available for Sale - Ending Inventory (LIST)(3,500 $8) + (3,400 $6) $ 107,700 48,400 Cost of Goods Sold (FIFO)(3,700 $5) + (7,000 $6) $ 59,300 LIFO Goods Available for Sale - Ending Inventory (FIST)(3,700 $5) + (3,200 $6) $ 107,700 37,700 Cost of Goods Sold (LIFO)(3,500 $8) + (7,000 $6) $ 70,000 $ 107,700 Weighted average unit cost: = $ 6.19 per unit 17,400 units Weighted Average Goods Available for Sale - Ending Inventory (6,900 $6.19) 107,700 42,711 Cost of Goods Sold (10,500 $6.19) 4: $ $ 64,995 Sales revenue: [(3,300 $32) + (7,200 $34) = $350,400 6: LIFO may be preferred for income tax purposes because it reports less taxable income (when costs are rising) because the higher costing units are used to calculate Cost of Goods Sold. A higher Cost of Goods Sold means less Income from Operations and therefore reduces income taxes. ___________________________________________________ _ [The following information applies to the questions displayed below.] Sandals Company was formed on January 1, 2010, and is preparing the annual financial statements dated December 31, 2010. Ending inventory information about the four major items stocked for regular sale follows: Product Line Air Flow Blister Buster Coolonite Dudesly Quantity on Hand 32 64 21 14 Ending Inventory, 2010 Unit Cost When Market Value Acquired (FIFO) at Year-End $11 $14 42 34 58 51 29 37 8. award: 7 out of 7 points -2-2 http://ezto.mhhm. Requirement 1: Compute the amount that should be reported for the 2010 ending inventory using the LCM rule applied to each item. (Omit the "$" sign in your response.) Ending inventory $ 4,005 Explanation: 1: Item Quantity Total Cost Total Market LCM Valuation Air Flow 32 $11= $ 352$14= $ 448 $ 352 B Buster 64 42= 2,688 34= 2,176 2,176 Coolonite 21 58= 1,218 51= 1,071 1,071 Dudesly 14 29= 406 37= 518 406 Total $ 4,664 $ 4,213 $ 4,005 Inventory valuation that should be used (LCM) is $4,005. 9. award: 7 out of 7 points -2-2 http://ezto.mhhm. Requirement 2: How will the write-down of inventory to lower of cost or market affect the company's expenses reported for the year ended December 31, 2010? (Input the amount as positive value. Omit the "$" sign in your response.) Cost of goods sold will be increased by $ 659 Explanation: 2: The write-down to lower of cost or market will increase Cost of Goods Sold by the amount of the write-down, $659: Total Cost - LCM Valuation = Write-down $4,664 - $4,005 = $659 Write-down ____________________________________________________ 10. award: 7 out of 7 points -2-2 http://ezto.mhhm. During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events was as follows: June 3 Purchased goods for $3,500 from Diamond Inc. with terms 1/10, n/30. 5 Returned goods costing $1,600 to Diamond Inc. for full credit. 6 Purchased goods from Club Corp. for $1,200 with terms 1/10, n/30. 11 Paid the balance owed to Diamond Inc. 22 Paid Club Corp. in full. Required: Assume that Ace uses a perpetual inventory system and that the company had no inventory on hand at the beginning of the month. Calculate the cost of inventory as of June 30. (Input all amounts as positive values. Omit the "$" sign in your response.) Purchases Less: Purchase returns Less: Purchase discount from Diamond $ 4,700 1,600 19 Cost of inventory as of June 30 $ 3,081 Explanation: Purchases ($3,500 + $1,200) = 4,700 Purchase discount from Diamond [($3,500 - $1,600) x 1%] = (19)* * Diamond was paid 8 days after the purchase (within the discount period). Club Corp. was paid 16 days after the purchase (outside the discount period). ____________________________________________________ 11. award: 7 out of 7 points -2-2 http://ezto.mhhm. During the month of June, Ace Incorporated purchased goods from two suppliers. The sequence of events was as follows: June 3 Purchased goods for $3,200 from Diamond Inc. with terms 2/10, n/30. 5 Returned goods costing $1,100 to Diamond Inc. for full credit. 6 Purchased goods from Club Corp. for $1,000 with terms 2/10, n/30. 11 Paid the balance owed to Diamond Inc. 22 Paid Club Corp. in full. Required: Using the information, prepare journal entries to record the transactions, assuming Ace uses a perpetual inventory system. (Omit the "$" sign in your response.) Date June 3 June 5 June 6 General journal Inventory Accounts payable Debit 3,200 Credit 3,200 Accounts payable Inventory 1,100 Inventory Accounts payable 1,000 1,100 1,000 June 11 Accounts payable 2,100 2,058 Cash 2 42 Inventory June 22 2 Accounts payable Cash 1,000 1,000 Explanation: June 11 Accounts Payable ($3,200 - $1,100) = 2,100 Cash ($2,100 98%) = 2,058 Inventory ($2,100 2%) = 42 ___________________________________________________ _ [The following information applies to the questions displayed below.] Gladstone Company uses a periodic inventory system. At the end of the annual accounting period, December 31, 2009, the accounting records for the most popular item in inventory showed the following: Transactions Beginning inventory, January 1, 2009 Transactions during 2009: a. Purchase, January 30 b. Sale, March 14 ($8 each) c. Purchase, May 1 d. Sale, August 31 ($8 each) Units 1,850 Unit Cost $ 4.00 3,000 (1,550) 1,400 (1,950) 6.00 11.00 12. award: 7 out of 7 points -2-2 http://ezto.mhhm. Requirement 1: Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31, 2009, under each of the following inventory costing methods. For Specific Identification, assume that the March 14, 2009, sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30, 2009. And that the sale of August 31, 2009, was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1, 2009. (Do not round Weighted average cost per unit. Round your final answers to the nearest dollar amount. Omit the "$" sign in your response.) a. b. c. d. Last-in, first-out. Weighted average cost. First-in, first-out. Specific identification. Goods available for sale $ 40,800 $ 40,800 $ 40,800 $ 40,800 Ending inventory $ 12,800 $ 17,952 $ 23,500 $ 19,900 Cost of goods sold $ 28,000 $ 22,848 $ 17,300 $ 20,900 Explanation: Goods available for sale for all methods: Units Unit Cost $ 4.00 $ 6.00 11.00 Total Cost Beginning inventory, January 1, 2009 Purchase, January 30, 2009 Purchase, May 1, 2009 1,850 3,000 1,400 Goods available for sale Goods sold 6,250 3,500 Ending inventory 2,750units Ending inventory and Cost of goods sold: a.Last-in, first-out: Ending inventory (1,850 units $4.00) + (900 units $6.00) $ 12,800 (1,400 units $11.00) + (2,100 units $6.00) $ 28,000 $40,800 6,250 = $6.53 (2,750 units $6.53) $ 17,952 (3,500 units $6.53) $ 22,848 Cost of goods sold b Weighted-average cost: . Average unit cost Ending inventory Cost of goods sold c.First-in, first-out: $ 7,400 18,000 15,400 40,800 Ending inventory (1,400 units $11.00) + (1,350 units $6.00) Cost of goods sold d.Specific identification: Ending inventory Cost of goods sold $ 23,500 (1,850 units $4.00) + (1,650 units $6.00) $ 17,300 (680 units $11.00) + (2,070 units $6.00) $ 19,900 (620 units $4.00) + (930 units $6.00) + (1,230 units $4.00) + (720 units $11.00) $ 20,900 13. award: 7 out of 7 points -2-2 http://ezto.mhhm. Requirement 2: (a) Of the four methods, which will result in the highest gross profit? First-in, first-out (b) Of the four methods, Which will result in the lowest income taxes? Last-in, first-out Explanation: (a): The method that results in the highest gross profit is the method with the lowest cost of goods sold - first-in, firstout (FIFO). (b): The method that results in the lowest income tax expense is the method with the highest cost of goods sold - last-in, first-out (LIFO). ____________________________________________________ 14. award: 7 out of 7 points -2-2 http://ezto.mhhm. Harman International Industries is a world leading producer of loudspeakers and other electronics products, which are sold under brand names like JBL, Infinity, and Harman/Kardon. The company reported the following amounts in its financial statements (in millions): Net Sales Cost of Goods Sold Beginning Inventory Ending Inventory $ 2008 2007 2,800 $ 2,294 1,980 1,665 390 376 414 390 Requirement 1: Determine the inventory turnover ratio and average days to sell inventory for 2008 and 2007. (Consider 365 days in a year. Round your answer to 1 decimal place.) Inventory turnover ratio Days to Sell 4.9 74.5 2008 times per year days 4.3 84.9 2007 times per year days Requirement 2: Harman international industries' competitor, Pioneer Corporation, whose inventory turns over 4 times per year (91.3 days to sell). Assume both companies use the same inventory costing method (FIFO). Which company's inventory turns over faster? Harman International Industries Explanation: 1: 2008 Inventory Turnover Ratio = Cost of Goods Sold 2007 = 4.9* times per year 4.3** times per year = 74.5 days 84.9 days Average Inventory Days to Sell * 4.9 = = 365 Days Inventory Turnover Ratio ** 4.3 = $1,980 $1,665 ($390 + $414) 2 ($376 + $390) 2 2: The inventory turnover ratio reflects how many times average inventory was made and sold during the year. Based on these calculations, in 2008 Harman International Industries made and sold its average inventory 4.9 times. All things being equal, a direct comparison to the inventory managers at Pioneer Corporation would reflect favorably on Harman management due to the fact the competitor has a slower inventory turnover ratio at 4 times per year. Harman (74.5 days) has the stronger inventory managers as it turns over inventory approximately 16.8 days faster than does Pioneer Corporation (91.3 days)