Question
In: Accounting
5. The data regarding purchases and sales of a commodity is given in the table below:...
5. The data regarding purchases and sales of a commodity is given in the table below:
|
Date |
Description |
Units |
Unit Cost |
||||||||
|
May/01 |
Inventory |
25 |
$40 |
||||||||
|
May/06 |
Sale |
20 |
$50 |
||||||||
|
May/08 |
Purchase |
20 |
$41 |
||||||||
|
May/16 |
Sale |
10 |
$55 |
||||||||
|
May/20 |
Purchase |
20 |
$42 |
||||||||
|
May/23 |
Sale |
25 |
$55 |
||||||||
|
May/30 |
Purchase |
15 |
43 |
||||||||
Instructions:
-
Determine the cost of the inventory balance at May/31, using the FIFO and LIFO
Perpetual.
-
Determine the cost of the inventory balance at May/31 using the Average Cost
periodic method.
-
Calculate the Cost of Goods Sold using the three methods above.
-
Journalize the entries for sales and cost of goods sold.
-
Calculate the gross profit under each method, assuming the sale price of each unit sold was $40.
-
Which method would you use if you want to save on taxes at the end of the year? Explain.
Solutions
Expert Solution
| FIFO | Cost of Goods Available for sale | Cost of Goods Sold | Ending Balance | |||||||
| Date | Activity | Units | Unit Price | Amount | Units | Unit Price | Amount | Units | Unit Price | Amount |
| May-01 | Beginning Inventory | 25 | $ 40.00 | $ 1,000.00 | 25 | $ 40.00 | $ 1,000.00 | |||
| May-06 | Sales | 20 | $ 40.00 | $ 800.00 | 5 | $ 40.00 | $ 200.00 | |||
| May-08 | Purchase | 20 | $ 41.00 | $ 820.00 | 5 | $ 40.00 | $ 200.00 | |||
| 20 | $ 41.00 | $ 820.00 | ||||||||
| May-16 | Sales | 5 | $ 40.00 | $ 200.00 | ||||||
| 5 | $ 41.00 | $ 205.00 | 15 | $ 41.00 | $ 615.00 | |||||
| May-20 | Purchase | 20 | $ 42.00 | $ 840.00 | 15 | $ 41.00 | $ 615.00 | |||
| 20 | $ 42.00 | $ 840.00 | ||||||||
| May-23 | Sales | 15 | $ 41.00 | $ 615.00 | ||||||
| 10 | $ 42.00 | $ 420.00 | 10 | $ 42.00 | $ 420.00 | |||||
| May-30 | Purchase | 15 | $ 43.00 | $ 645.00 | 10 | $ 42.00 | $ 420.00 | |||
| 15 | $ 43.00 | $ 645.00 | ||||||||
| Total | 80 | $ 3,305.00 | 55 | $ 2,240.00 | 25 | $ 1,065.00 |
| LIFO | Cost of Goods Available for sale | Cost of Goods Sold | Ending Balance | |||||||
| Date | Activity | Units | Unit Price | Amount | Units | Unit Price | Amount | Units | Unit Price | Amount |
| May-01 | Beginning Inventory | 25 | $ 40.00 | $ 1,000.00 | 25 | $ 40.00 | $ 1,000.00 | |||
| May-06 | Sales | 20 | $ 40.00 | $ 800.00 | 5 | $ 40.00 | $ 200.00 | |||
| May-08 | Purchase | 20 | $ 41.00 | $ 820.00 | 5 | $ 40.00 | $ 200.00 | |||
| 20 | $ 41.00 | $ 820.00 | ||||||||
| May-16 | Sales | 10 | $ 41.00 | $ 410.00 | 5 | $ 40.00 | $ 200.00 | |||
| 10 | $ 41.00 | $ 410.00 | ||||||||
| May-20 | Purchase | 20 | $ 42.00 | $ 840.00 | 5 | $ 40.00 | $ 200.00 | |||
| 10 | $ 41.00 | $ 410.00 | ||||||||
| 20 | $ 42.00 | $ 840.00 | ||||||||
| May-23 | Sales | 20 | $ 42.00 | $ 840.00 | 5 | $ 40.00 |
 ekkarill92 answered 1 year agoRelated SolutionsThe following data regarding purchases and sales of a commodity were taken from the related perpetual...The following data regarding purchases and sales of a commodity
were taken from the related perpetual inventory account:
June 1
Balance
25 units at $60
6
Sale
20 units
8
Purchase
20 units at $61
16
Sale
10 units
20
Purchase
20 units at $62
23
Sale
25 units
30
Purchase
15 units at $63
Calculate the cost of the ending inventory at June 30, using (a)
the first-in, first-out (FIFO) method and (b) the last-in,
first-out (LIFO) method. Identify...
The following data regarding purchases and sales of a commodity were taken from the related perpetual...
The following data regarding purchases and sales of a commodity
were taken from the related perpetual inventory account: (30
points)
June 1
Balance
25 units at $60
6
Sale
20 units at $70
8
Purchase
20 units at $61
16
Sale
10 units at $70
20
Purchase
20 units at $62
23
Sale
25 units at $70
30
Purchase
15 units at $63
Record the inventory, purchases, cost of goods sold and sales...
The following data regarding purchases and sales of a commodity were taken from the related perpetual...The following data regarding purchases and sales of a commodity
were taken from the related perpetual inventory account: (30
points) June 1 Balance 25 units at $60 6 Sale 20 units at $70 8
Purchase 20 units at $61 16 Sale 10 units at $70 20 Purchase 20
units at $62 23 Sale 25 units at $70 30 Purchase 15 units at $63
Record the inventory, purchases, cost of goods sold and sales in a
perpetual inventory record similar...
The following data regarding purchases and sales of a commodity were taken from the related perpetual...The following data regarding purchases and sales of a commodity
were taken from the related perpetual inventory account: (30
points) June 1 Balance 25 units at $60 6 Sale 20 units at $70 8
Purchase 20 units at $61 16 Sale 10 units at $70 20 Purchase 20
units at $62 23 Sale 25 units at $70 30 Purchase 15 units at $63
Record the inventory, purchases, cost of goods sold and sales in a
perpetual inventory record similar...
The following data regarding purchases and sales of a commodity were taken from the related perpetual...The following data regarding purchases and sales of a commodity
were taken from the related perpetual inventory account: June 1
Balance 25 units at $60 6 Sale 20 units 8 Purchase 20 units at $61
16 Sale 10 units 20 Purchase 20 units at $62 23 Sale 25 units 30
Purchase 15 units at $63 Calculate the cost of the ending inventory
at June 30, using (a) the first-in, first-out (FIFO) method and (b)
the last-in, first-out (LIFO) method. Identify...
The following data regarding purchases and sales of a commodity were taken from the related perpetual...The following data regarding purchases and sales of a commodity
were taken from the related perpetual inventory account:
June 1
Balance
25 units at $60
6
Sale
20 units
8
Purchase
20 units at $61
16
Sale
10 units
20
Purchase
20 units at $62
23
Sale
25 units
30
Purchase
15 units at $63
Calculate the cost of the ending inventory at June 30, using (a)
the first-in, first-out (FIFO) method and (b) the last-in,
first-out (LIFO) method. Identify...
Beginning inventory, purchases, and sales data on Commodity A, as taken from Rich Company’s perpetual inventory...Beginning inventory, purchases, and sales data on
Commodity A, as taken from Rich Company’s perpetual inventory
account, were as follows:
July 1 Beginning
inventory 5
units @4 =$20
15
units $5 =$75
6
SALE 16
UNITS
10
PURCHASE 15
UNITS @$6
20
SALE 11
UNITS
30
PURCHASE 10
UNITS @$7
31
SALE 7
UNITS
Determine the cost of the ending inventory at JULY 31,
by: (a) the first- in-first- out method, and (b) the last-in-
first- out method.
The following data regarding purchases and sales of a commoditywere taken from the related perpetual...The following data regarding purchases and sales of a commodity
were taken from the related perpetual inventory account:June 1Balance25 units at $606Sale20 units8Purchase20 units at $6116Sale10 units20Purchase20 units at $6223Sale25 units30Purchase15 units at $63Calculate the cost of the ending inventory at June 30, using (a)
the first-in, first-out (FIFO) method and (b) the last-in,
first-out (LIFO) method. Identify the quantity, unit price, and
total cost of each lot in the inventory.(a) First-In, First-Out (FIFO):Date: JuneQuantityUnit PriceTotal costunits at$$units at$BLANKTotal$(b) Last-In,...
Refer to the gasoline sales time series data in the given table.
Refer to the gasoline sales time series data in the given table.
Week
Sales (1000s of gallons)
1
17
2
21
3
19
4
24
5
19
6
15
7
21
8
19
9
23
10
19
11
15
12
22
Compute four-week and five-week moving averages for the time series. Round your answers to two decimal places.
Week
Sales
4-WeekMoving Average
5-WeekMoving Average
1
17
2
21
3
19
4
24
...
Refer to the gasoline sales time series data in the given table.Refer to the gasoline sales time series data in the given table. a. Compute four-week and five-week moving averages for the time series. Round your answers to two decimal places.b. Compute the MSE for the four-week and five-week moving average forecasts. Round your intermediate calculations and final answers to two decimal places. MSE for four-week moving average = MSE for five-week moving average = c. What appears to be the best number of weeks of past data (three, four, or five) to use in...
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