Question
In: Accounting
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 transactions.
| Date | Transaction | Number of Units | Unit Cost | Total Cost | |||||||||
| Jan. | 1 | Beginning inventory | 52 | $ | 44 | $ | 2,288 | ||||||
| Apr. | 7 | Purchase | 132 | 46 | 6,072 | ||||||||
| Jul. | 16 | Purchase | 202 | 49 | 9,898 | ||||||||
| Oct. | 6 | Purchase | 112 | 50 | 5,600 | ||||||||
| 498 | $ | 23,858 | |||||||||||
For the entire year, the company sells 432 units of inventory for $62 each.
Exercise 6-4A Part 2
2. Using LIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
Solutions
Expert Solution
Ending inventory=Beginning inventory+Purchases-Sales
=(52+132+202+112-432)
=66 units
As per LIFO;cost of goods sold=(112 units@$50)+(202 units@$49)+(118 units@$46)
=$20926
Ending inventory=(14 units@$46)+(52 units@$44)
=$2932
Sales revenue=432*62
=$26784
Gross profit=Sales-Cost of goods sold
=$26784-20926
=$5858
NOTE:As per LIFO;goods purchased last are sold off first.Hence 432 units sold would consist of 112 units of Oct 6 purchases;202 units of July 16 purchases and the balance=(432-112-202)=118 units of Apr 7
Hence ending inventory would consist of (132-118)=14 units of Apr 7 and 52 units of beginning inventory.
ekkarill92 answered 2 years agoRelated Solutions
1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
During the year, TRC Corporation has the following inventory transactions. Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 60 $ 52 $ 3,120 Apr. 7 Purchase 140 54 7,560 Jul. 16 Purchase 210 57 11,970 Oct. 6 Purchase 120 58 6,960 530 $ 29,610 For the entire year, the company sells 450 units of inventory for $70 each.
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Greg's Bicycle Shop uses a periodic inventory system.
Date
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March
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Beginning inventory
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Date
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Units
Unit Cost
Total Cost
March 1
Beginning Inventory
20
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March 5
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sales revenue, and gross profit for four inventory methods (LO6-3,
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displayed below.]
Pete’s Tennis Shop has the following transactions related to its
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Pete’s Tennis Shop uses a periodic inventory system.
Date
Transactions
Units
Unit Cost
Total Cost
August
1
Beginning inventory
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$
152
$
1,216
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4
Sale ($185 each)
5
August...
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Required information Problem 6-2B Calculate ending inventory, cost of goods sold, sales revenue, and gross profit...
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Problem 6-2B Calculate ending inventory, cost of goods sold,
sales revenue, and gross profit for four inventory methods (LO6-3,
6-4, 6-5)
[The following information applies to the questions
displayed below.]
Pete’s Tennis Shop has the following transactions related to its
top-selling Wilson tennis racket for the month of August.
Pete’s Tennis Shop uses a periodic inventory system.
Date
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Unit Cost
Total Cost
August
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Required information Problem 6-2B Calculate ending inventory, cost of goods sold, sales revenue, and gross profit...
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Problem 6-2B Calculate ending inventory, cost of goods sold,
sales revenue, and gross profit for four inventory methods (LO6-3,
6-4, 6-5)
[The following information applies to the questions
displayed below.]
Pete’s Tennis Shop has the following transactions related to its
top-selling Wilson tennis racket for the month of August.
Pete’s Tennis Shop uses a periodic inventory system.
Date
Transactions
Units
Unit Cost
Total Cost
August
1
Beginning inventory
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$
152
$
1,216
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4
Sale ($185 each)...
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Jan. 20 Sale 10 blank
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(Note: Use four decimal places for per-unit calculations
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