Problem 2

Horizon Furnishings, Inc. completed these inventory transactions during the month of March: DATE ITEM QUANTITY UNIT COST March 1 Balance 10 $90 March 4 Purchase 38 87 March 12Sale 42 March 2Purchase 60 S103 March 31 Sale 62 A) Compute the cost of goods sold and the ending inventory if LIFO is used, showing your work below. YOU MUST PLACE YOUR ANSWERS IN THE BOLD OUTLINED BOXES ON THE TOTALS LINE DATE PURCHASES INVENTORY ON HAND COST OF SALES B) Compute the cost of goods sold and the ending inventory if AVERAGE COST is used, showing your work below. YOU MUST PLACE YOUR ANSWERS IN THE BOLD OUTLINED BOXES ON THE TOTALS LINE. COST OF DATE SALES PURCHASES INVENTORY ON HAND VI2 22 TOTAL Calculations for averages: Assume Horizon Furnishings in problem 1 is using the LIFO inventory method and all sales are priced at $240 per unit. All purchases are on account. Journalize the transaction for March 12th and for March 22nd. DATE ACCOUNTS DR CR March 12 Problem 3 - (4 points) S&C Inc. has the following inventory records: Inventory Item 2434 6754 Inventory Quantity Unit Cost Unit Market Value 15 $32 $31 22 s28 $33 8 $30 $35 7890 Prepare the journal entry to record the write down of the inventory value. DATE ACCOUNTS DR CR Dec. 31 Calculations: 11 AT&T 5GE 7:45 PM 38%D The required answer is attached herewith Quantity 2 3 units in stock Unit cost 90 87 Date item 01 march Balance 04 march purchase 12 march sale 22 march purchase 31 march Sale 66 103 10 A) LIFO (last in First out) Purchase Calculation Cost of Sales Calculation Inventory Calculation 12 13 14 Date 03/01 03/04 900 3306 38x87 4206 900-3306 16 03/12 Sale 3306 3RX87 360 4x90 1440 4206-3306-360 7620 1440 6180 18 03/22 6180 60x103 2003/31 Sale 6180 60x103 180 2x90 10026 1260 7620-6180-180 1260 22 Totals 26 B) Avg Cost Method Inventory Calculation 900 28 Date Purchase Calculation Cost of Sales Calculation 2903/01 30 03/04 3306 38x87 3103/12 Sale 3680.46 42x87.63 32 03/22 6180 60x103 33 03/31 Sale 6299.2 62x101.6 4206 900-3306 525.54 4206-3680.46 6705.54 525.54+6180 406.34 6705.54-6299.2 406.34 35 Totals 9979.66 37 38 39 Calculation of average cost Average cost on 12 march = 4206/48 = 87.63 Average cost on 31 march=6705.54/66 = 101.60