In: Accounting
Hermione Co. reported the information shown in Table 5-1.
Table 5-1
Units |
Unit Cost |
Total Cost |
Units Sold |
|
Beginning inventory (Jan. 1) |
4 |
$400 |
$1,600 |
|
Sale (Mar. 1) |
3 |
|||
Purchase (Apr. 15) |
4 |
405 |
1,620 |
|
Sale (June 22) |
3 |
|||
Purchase (Oct. 11) |
2 |
425 |
850 |
|
Total Units in ending inventory |
10 4 |
$4,070 |
6 |
10. Refer to Table 5-1. Assume that Hermione uses perpetual LIFO. The cost of the ending inventory is:
A. $1,700.
B. $1,670.
C. $1,655.
D. $1,600.
11. Refer to Table 5-1. Assume that Hermione uses perpetual weighted average costing. The average cost of a unit sold on June 22 is:
A. $400.
B. $402.50.
C. $404.
D. $405.
12. Refer to Table 5-1. Assume that Hermione uses perpetual FIFO. The entry to record the March 1 credit sale at a sale price of $800 per unit would include all of the following EXCEPT a:
A. credit to Inventory, $2,400.
B. debit to Cost of Goods Sold, $1,200.
C. debit to Accounts Receivable, $2,400.
D. credit to Sales Revenue, $2,400.
13. Refer to Table 5-1. Assume that Hermione uses periodic FIFO. The cost of goods sold for the period is:
A. $2,470.
B. $2.410.
C. $1,660.
D. $1,600.
10.C.$1,655.
As per Perpetual LIFO:
march 1 sale of 3 units will be from beginning inventory .(so 1 unit will be remaining)
june 22 sale of 3 units will be from april 15 purchase....(so 1 unit from opening inventory and 1 unit from april 15 purchase will be in closing inventory).
by the end of year 4 units (1 from beginning inventory + 1 from apr 15 + 2 from oct 11 ) will be in ending inventory
value =(1*$400) +(1*$405) +(2*$425) =>$1,655.
C.$404.
value of units from opening inventory (1 unit *$400) | $400 |
value of units purchased on Apr 15.(4 units*$405) | $1,620 |
weighted average cost per unit as on june 22 [(1620+400) / (1unit+4units)] | $404 |
12.A.Credit to inventory $2,400.
Credit to merchandise inventory will be for ($400 per unit * 3)=>$1,200..
13.B.$2,410.
as per perpetual FIFO,out of 6 units sold , 4 units will be from beginning inventory and 2 units will be from Apr 15 purchase
value = ($400*4) +($405*2) =>$2,410.