Principles of Accounting 1

Chapter 6 Homework

Exercise 1 FIFO Perpetual

Lighting Designs by Laura has the following list of beginning inventory, purchases, and sales for the month of June:

1^st Beginning Inventory 600 light bulbs at $0.20

^4th Purchase 400 light bulbs at $0.30

10^th Sale 750 light bulbs at $1.75

13^th Purchase 300 light bulbs at $0.25

19^th Sale 370 light bulbs at $2.00

23^rd Purchase 300 light bulbs at $0.35

28^th Sale 160 light bulbs at $1.80

Determine the cost of merchandise sold for each sale (10^th, 19^th, and 28^th). Calculate the cost of ending inventory using the first-in, first-out method under a perpetual inventory system.

Exercise 2 LIFO Perpetual

Lighting Designs by Laura has the following list of beginning inventory, purchases, and sales for the month of June:

1^st Beginning Inventory 600 light bulbs at $0.20

4^th Purchase 400 light bulbs at $0.30

10^th Sale 750 light bulbs at $1.75

13^th Purchase 300 light bulbs at $0.25

19^th Sale 370 light bulbs at $2.00

23^rd Purchase 300 light bulbs at $0.35

28^th Sale 160 light bulbs at $1.80

Determine the cost of merchandise sold for each sale (10^th, 19^th, and 28^th). Calculate the cost of ending inventory using the last-in, first-out method under a perpetual inventory system.

Exercise 3 Periodic (FIFO, LIFO, Average)

Spring River sells bottled water using a periodic inventory system. The following is a list of beginning inventory and purchases for bottles used in manufacturing their spring water.

Beginning Inventory 10,000 bottles at $0.10

First Purchase 5,500 bottles at $0.16

Second Purchase 6,000 bottles at $0.12

Third Purchase 4,000 bottles at $0.18

At the end of the year, 4,500 bottles remained in ending inventory. What is cost of merchandise sold and ending inventory under the FIFO, LIFO and average cost methods? Present your answers in the following form (in an excel spreadsheet). Round to the nearest dollar.

Cost

Inventory Method Merchandise Inventory Merchandise Sold

a. FIFO $ $

b. LIFO

c. Weighted average cost