Question

In: Accounting

Hermione Co. reported the information shown in Table 5-1. Table 5-1 Units Unit Cost Total Cost...

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.

Solutions

Expert Solution

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.

ekkarill92 answered 3 years ago
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