Question
In: Accounting
Compute ending inventory, cost of goods sold, and gross profit.
My question: Assume the company uses three inventory pools instead of one. Compute ending inventory, cost of goods sold, and gross profit. (Round price index to 2 decimal places, e.g. 1.45 and final answers to 0 decimal places, e.g. 6,548.)
William’s Televisions produces television sets in three categories: portable, midsize, and flat-screen. On January 1, 2020, William adopted dollar-value LIFO and decided to use a single inventory pool. The company’s January 1 inventory consists of:
|
Category |
Quantity |
Cost per Unit |
Total Cost |
|||
| Portable | 5,400 | $ 100 | $ 540,000 | |||
| Midsize | 7,200 | 250 | 1,800,000 | |||
| Flat-screen | 2,700 | 400 | 1,080,000 | |||
| 15,300 | $ 3,420,000 |
During 2020, the company had the following purchases and sales.
|
Category |
Quantity |
Cost per Unit |
Quantity |
Selling Price |
||||
| Portable | 13,500 | $ 110 | 12,600 | $ 150 | ||||
| Midsize | 18,000 | 300 | 21,600 | 400 | ||||
| Flat-screen | 9,000 | 500 | 5,400 | 600 | ||||
| 40,500 | 39,600 |
(b)
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Your answer is incorrect.
Assume the company uses three inventory pools instead of one. Compute ending inventory, cost of goods sold, and gross profit. (Round price index to 2 decimal places, e.g. 1.45 and final answers to 0 decimal places, e.g. 6,548.)
| Ending inventory |
$ |
|
| Cost of goods sold |
$ |
|
| Gross profit |
$ |
Solutions
Expert Solution
Calculation of Ending Inventory:
Value of closing stock of Portable = =(5400*100)+(13500-12600)*110=$6,39,000
Value of closing stock of Mid-size=3600*250=$9,00,000
Value of closing stock of Flat screen = 2700*400+(9000-5400)*500 = $28,80,000.
| Opening stock | Purchases | Sales | Closing Stock | Value of Closing Stock | |
| Portable | 5400 | 13500 | 12600 | 6300 | 639000 |
| Mid size | 7200 | 18000 | 21600 | 3600 | 900000 |
| Flat Screen | 2700 | 9000 | 5400 | 6300 | 2880000 |
Calculation of Cost of goods sold :
Cost of goods sold = Opening stock + Purchases -Closing Stock
| Opening stock($) | Purchases($) | Closing Stock($) | Cost of goods sold($) | ||
| Portable | 540000 | 1485000 | 639000 | 1386000 | |
| Mid size | 1800000 | 5400000 | 900000 | 6300000 | |
| Flat Screen | 1080000 | 4500000 | 2880000 | 2700000 |
Calculation of Gross profit:
| Sales Value (1) | Cost of goods sold (2) | Gross Profit (1-2) | |
| Portable | 1890000 | 1386000 | $504000 |
| Mid size | 8640000 | 6300000 | $2340000 |
| Flat Screen | 3240000 | 2700000 | $540000 |
Gross profit
Portable $504000
Mid size $2340000
Flat Screen $540000
Shaik sultan answered 3 years agoRelated Solutions
Using LIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
Exercise 6-4A Calculate inventory amounts when costs are rising
(LO6-3)During the year, TRC Corporation has the following inventory
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for $62 each.Exercise 6-4A Part 22. Using LIFO, calculate ending inventory, cost
of goods sold, sales revenue, and gross profit.
Henderson Company uses the gross profit method to estimate ending inventory and cost of goods sold...
Henderson Company uses the gross profit method to estimate
ending inventory and cost of goods sold when preparing monthly
financial statements required by its bank. Inventory on hand at the
end of July was $125,000. The following information for the month
of August was available from company records:
Purchases
$
224,000
Freight-in
5,700
Sales
355,000
Sales returns
9,500
Purchases returns
4,800
In addition, the controller is aware of $12,000 of inventory that
was stolen during August from one of the...
Henderson Company uses the gross profit method to estimate ending inventory and cost of goods sold...
Henderson Company uses the gross profit method to estimate
ending inventory and cost of goods sold when preparing monthly
financial statements required by its bank. Inventory on hand at the
end of July was $122,000. The following information for the month
of August was available from company records: Purchases $ 218,000
Freight-in 5,100 Sales 349,000 Sales returns 8,900 Purchases
returns 4,200 In addition, the controller is aware of $12,000 of
inventory that was stolen during August from one of the...
1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
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1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
2. Using...
Problem 6-2A Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for four...
Problem 6-2A Calculate ending inventory, cost of goods sold,
sales revenue, and gross profit for four inventory methods (LO6-3,
6-4, 6-5)
[The following information applies to the questions
displayed below.]
Greg’s Bicycle Shop has the following transactions related to its
top-selling Mongoose mountain bike for the month of March.
Greg's Bicycle Shop uses a periodic inventory system.
Date
Transactions
Units
Unit
Cost
Total Cost
March
1
Beginning inventory
20
$
250
$
5,000
March
5
Sale ($400
each)
15
March...
Problem 6-2A Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for four...
Problem 6-2A Calculate ending inventory, cost of goods sold,
sales revenue, and gross profit for four inventory methods (LO6-3,
6-4,6-5) [The following information applies to the questions
displayed below.] Greg’s Bicycle Shop has the following
transactions related to its top-selling Mongoose mountain bike for
the month of March. Greg's Bicycle Shop uses a periodic inventory
system.
Date
Transactions
Units
Unit Cost
Total Cost
March 1
Beginning Inventory
20
$215
$4,300
March 5
Sale ($330 each)
15
March 9
Purchase
10...
Problem 6-2B Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for four...
Problem 6-2B Calculate ending inventory, cost of goods sold,
sales revenue, and gross profit for four inventory methods (LO6-3,
6-4, 6-5)
[The following information applies to the questions
displayed below.]
Pete’s Tennis Shop has the following transactions related to its
top-selling Wilson tennis racket for the month of August.
Pete’s Tennis Shop uses a periodic inventory system.
Date
Transactions
Units
Unit Cost
Total Cost
August
1
Beginning inventory
8
$
152
$
1,216
August
4
Sale ($185 each)
5
August...
Required information Problem 6-2B Calculate ending inventory, cost of goods sold, sales revenue, and gross profit...
Required information
Problem 6-2B Calculate ending inventory, cost of goods sold,
sales revenue, and gross profit for four inventory methods (LO6-3,
6-4, 6-5)
[The following information applies to the questions
displayed below.]
Pete’s Tennis Shop has the following transactions related to its
top-selling Wilson tennis racket for the month of August.
Pete’s Tennis Shop uses a periodic inventory system.
Date
Transactions
Units
Unit Cost
Total Cost
August
1
Beginning inventory
8
$
156
$
1,248
August
4
Sale ($205 each)...
Required information Problem 6-2B Calculate ending inventory, cost of goods sold, sales revenue, and gross profit...
Required information
Problem 6-2B Calculate ending inventory, cost of goods sold,
sales revenue, and gross profit for four inventory methods (LO6-3,
6-4, 6-5)
[The following information applies to the questions
displayed below.]
Pete’s Tennis Shop has the following transactions related to its
top-selling Wilson tennis racket for the month of August.
Pete’s Tennis Shop uses a periodic inventory system.
Date
Transactions
Units
Unit Cost
Total Cost
August
1
Beginning inventory
8
$
152
$
1,216
August
4
Sale ($185 each)...
Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly
Royal Gorge Company uses the gross profit method to estimate ending inventory and cost of goods sold when preparing monthly financial statements required by its bank. Inventory on hand at the end of October was $58,500. The following information for the month of November was available from company records:
Purchases.............................$110,000
Freight-in.....................................3,000
Sales..........................................180,000
Sales returns................................5,000
Purchases returns......................4,000
In addition, the controller is aware of $8,000 of inventory that was stolen during November from one of the company’s warehouses.
Required:
1....
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