Question
In: Accounting
Dalia Wahebi sells one type of machine, a mini-blender. She provides the following information for May...
Dalia Wahebi sells one type of machine, a mini-blender. She provides the following information for May 2018.
Dalia held 2 mini-blenders in inventory at 1 May 2018. They cost $1,200 each
|
Date |
Purchases |
Date |
Sales |
|
1 May |
3 @ $1,250 |
2 May |
4 @ $2,900 |
|
7 May |
4 @ $1,300 |
17 May |
4 @ $3,000 |
|
21 May |
8 @ $1,450 |
24 May |
7 @ $3,000 |
Dalia wants to know the value of closing inventory and also her Gross Profit for the month of May 2018.
REQUIRED
(a) Calculate the value of the closing inventory using FIFO and AVCO.
(b) Calculate the Gross Profit for the month of May 2018.
Solutions
Expert Solution
1)FIFO METHOD:
Inventory value = 2900
Cost of goods sold = 20,050
Gross profit = 44600- 20050 = 24550
| Date | Purchase | Cost of goods sold | Balance | |||||
| Units | rate | Units | rate | amount | Units | rate | amount | |
| Opening | 2 | 1200 | 2400 | |||||
| 01-May-20 | 3 | 1250 | 2 | 1200 | 2400 | |||
| 3 | 1250 | 3750 | ||||||
| Inventory | 6150 | |||||||
| 02-05-20 | 2 | 1200 | 2400 | 1 | 1250 | 1250 | ||
| 2 | 1250 | 2500 | ||||||
| Inventory | 1250 | |||||||
| 07-05-20 | 4 | 1300 | 1 | 1250 | 1250 | |||
| 4 | 1300 | 5200 | ||||||
| 6450 | ||||||||
| 17-05-20 | 1 | 1250 | 1250 | 1 | 1300 | 1300 | ||
| 3 | 1300 | 3900 | ||||||
| Inventory | 1300 | |||||||
| 21-05-20 | 8 | 1450 | 1 | 1300 | 1300 | |||
| 8 | 1450 | 11600 | ||||||
| Inventory | 12900 | |||||||
| 24-05-20 | 1 | 1300 | 1300 | 2 | 1450 | 2900 | ||
| 6 | 1450 | 8700 | ||||||
| Cost | 20050 | Inventory | 2900 |
2) AVCO METHOD:
Inventory value = 2,864
Cost of goods sold = 20,106
Gross profit = 44600 - 20106 = 24,494
| Date | Purchase | Cost of goods sold | Balance | |||||
| Units | rate | Units | rate | amount | Units | rate | amount | |
| Opening | 2 | 1200 | 2400 | |||||
| 01-May-20 | 3 | 1250 | 2 | 1200 | 2400 | |||
| 3 | 1250 | 3750 | ||||||
| 5 | 1230 | 6150 | ||||||
| Inventory | 6150 | |||||||
| 02-05-20 | 4 | 1230 | 4920 | 1 | 1230 | 1230 | ||
| Inventory | 1230 | |||||||
| 07-05-20 | 4 | 1300 | 1 | 1230 | 1250 | |||
| 4 | 1300 | 5200 | ||||||
| 5 | 1290 | 6450 | ||||||
| Inventory | 6450 | |||||||
| 17-05-20 | 4 | 1290 | 5160 | 1 | 1290 | 1290 | ||
| Inventory | 1290 | |||||||
 ekkarill92 answered 1 year agoRelated SolutionsJohnson and Company provides you the following information Purchase price of each Machine &nbJohnson and Company provides you the following information
Purchase price of each Machine
300,000
Useful life of each machine
5 years
Salvage value
100,000
Method of Depreciation
Straight line
Tax rate
50%
Cost of Debts
10%
Earnings before depreciation & Tax
Machine
Year 1
Year 2
Year 3
Year 4
Year 5
X
200,000
10% increase
10% increase
10% increase
10% increase
Y
0
100,000
200,000
300,000
1200,000
Required which of the machine should...
Marigold Company purchased Machine #201 on May 1, 2017. The following information relating to Machine #201...Marigold Company purchased Machine #201 on May 1, 2017. The
following information relating to Machine #201 was gathered at the
end of May. Price $122,400 Credit terms 2/10, n/30 Freight-in $
1,152 Preparation and installation costs $ 5,472 Labor costs during
regular production operations $15,120 It is expected that the
machine could be used for 10 years, after which the salvage value
would be zero. Marigold intends to use the machine for only 8
years, however, after which it expects...
Sheffield Company purchased Machine #201 on May 1, 2017. The following information relating to Machine #201...Sheffield Company purchased Machine #201 on May 1, 2017. The
following information relating to Machine #201 was gathered at the
end of May. Price $96,900 Credit terms 2/10, n/30 Freight-in $ 912
Preparation and installation costs $ 4,332 Labor costs during
regular production operations $11,970 It is expected that the
machine could be used for 10 years, after which the salvage value
would be zero. Sheffield intends to use the machine for only 8
years, however, after which it expects...
Ellie May, a mother with type B blood, has a child with type O blood. she...Ellie May, a mother with type B blood, has a child
with type O blood. she claims that Jethro, who has type A blood, is
the father. He claims that he cannot possibly be the father. Based
on this information only, is it possible that Jethro is the
father?
If blood tests ordered by the judge revealed that the
father is homozygous in genotype, is it possible for Jethro to be
the father?
Ellie May, a mother with type B blood, has a child with type O blood. she...Ellie May, a mother with type B blood, has a child with type O
blood. she claims that Jethro, who has type A blood, is the father.
He claims that he cannot possibly be the father. Based on this
information only, is it possible that Jethro is the father?
If blood tests ordered by the judge revealed that the father is
homozygous in genotype, is it possible for Jethro to be the
father?
Can you show work using the punnet...
Ellie May, a mother with type B blood, has a child with type O blood. She...Ellie May, a mother with type B blood, has a child with type O
blood. She claims that Jethro, who has type A blood, is the father.
He claims that he cannot possibly be the father. Further, blood
tests ordered by the judge reveal that the father is homozygous.
The judge rules that:
a) Ellie May is right and Jethro must pay up.
b) Jethro is right and is a winner-winner (chicken dinner).
c) Ellie May cannot be the real...
The management of the Mini Mill Steel Company estimated the following elasticities for a special type...The management of the Mini Mill Steel Company estimated the
following elasticities for a special type of steel: EP 2, 1, and E
where x refers to steel XY and Y to aluminum. Next year, the firm
would like to increase the price of the steel it sells by 6
percent. The management forecasted that income will rise by 4
percent next year and that the price of aluminum will fall by 2
percent. (a) If the sales this year...
Lansing, Inc. provides the following information for one of its department’s operations for June (no new...Lansing, Inc. provides the following information for one of its
department’s operations for June (no new material is added in
Department T):
WIP inventory—Department T Beginning inventory ((8,000 units,
20% complete with respect to Department T costs)
Transferred-in costs (from Department S) $ 33,350
Department T conversion costs 9,020
Current work (18,500 units started)
Prior department costs 83,250
Department T costs 168,480
The ending inventory has 3,000 units, which are 50 percent
complete with respect to Department T costs and...
Lansing, Inc. provides the following information for one of its department’s operations for June (no new...Lansing, Inc. provides the following information for one of its
department’s operations for June (no new material is added in
Department T):
WIP inventory—Department T
Beginning inventory (15,000
units, 60% complete with respect to Department T costs)
Transferred-in costs (from
Department S)
$
116,000
Department T conversion
costs
53,150
Current work (35,000 units
started)
Prior department costs
280,000
Department T costs
209,050
The ending inventory has 5,000 units, which are 20 percent
complete with respect to Department T costs and...
Lansing, Inc. provides the following information for one of its department’s operations for June (no new...Lansing, Inc. provides the following information for one of its
department’s operations for June (no new material is added in
Department T):
WIP inventory—Department T
Beginning inventory ((9,400 units, 20% complete with respect to
Department T costs)
Transferred-in costs (from Department S)
$
52,390
Department T conversion costs
11,206
Current work (21,300 units started)
Prior department costs
125,670
Department T costs
202,950
The ending inventory has 4,400 units, which are 60 percent
complete with respect to Department T costs and...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
ADVERTISEMENT
|