Question
In: Accounting
Givoly Inc. uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year
Givoly Inc. uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2:
| Units | Unit Cost | ||||||||
| Inventory, December 31, prior year | 6,800 | $ | 8 | ||||||
| For the current year: | |||||||||
| Purchase, March 5 | 18,800 | 6 | |||||||
| Purchase, September 19 | 9,800 | 2 | |||||||
| Sale ($30 each) | 8,000 | ||||||||
| Sale ($32 each) | 15,800 | ||||||||
| Operating expenses (excluding income tax expense) | $ | 398,000 | |||||||
Required:
1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO. (Loss amounts should be indicated with a minus sign.)
Solutions
Expert Solution
FIFO IS first in first out
Total sales = 8000+15800=23800 (6800sold from beginning and 15000 from March 5 purchase)
cost of goods sold = 6800*$8+ 17000*6
= 156,400
ending inventory = beginning+ purchase - sold
=54,400+(18800*6+9800*2) - 156,400
=54,400+132,400 - 156,400
= 30,400
LIFO last in first out
sales=23800
cost of goods sold=9800*2 + 14000*6 (23800-9800 = 14000sold from march 5 purchase)
= 103,600
Ending inventory = 54,400 + 132,400 - 103,600
= 83,200
Total sales = 8000+15800=23800 (6800sold from beginning and 15000 from March 5 purchase)
Ramesh R answered 3 years agoRelated Solutions
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Givoly Inc. uses a periodic inventory system. At the end of the annual accounting period, December...
Givoly Inc. uses a
periodic inventory system. At the end of the annual accounting
period, December 31 of the current year, the accounting records
provided the following information for product 2:
Units
Unit Cost
Inventory,
December 31, prior year
6,000
$
10
For the current
year:
Purchase, March
5
18,000
8
Purchase,
September 19
9,000
4
Sale ($25
each)
8,800
Sale ($33
each)
15,000
Operating
expenses (excluding income tax expense)
$
390,000
1.
Prepare a separate income statement through pretax...
Givoly Inc. uses a periodic inventory system. At the end of the annual accounting period, December...
Givoly Inc. uses a periodic inventory system. At the end of the
annual accounting period, December 31 of the current year, the
accounting records provided the following information for product
2:
Units
Unit Cost
Inventory, December 31, prior year
7,900
$
11
For the current year:
Purchase, March 5
19,900
9
Purchase, September 19
10,900
5
Sale ($27 each)
8,900
Sale ($29 each)
16,900
Operating expenses (excluding income tax expense)
$
409,000
1. Prepare a separate income statement through pretax...
Beck Inc. uses a periodic inventory system. At the end of the annual accounting period, December...
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For the current year:
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19,000
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Purchase, September 19
10,000
5
Sale ($28 each)
8,000
Sale ($30 each)
16,000
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$
400,000
1. Prepare a separate income statement through
pretax...
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Units
Unit Cost
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Compute ending inventory and cost of goods sold for the current
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Inv Dec 31 prior year Units 2000 - $5 (unit cost)
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Purchase August 1: 3000 - $8
Inventory December 31 current year 4000: (blank)
Ending inventory (FIFO/LIFO/AVG COST)
Cost of goods sold (FIFO/LIFO/Avg Cost)
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