Question

In: Finance

The assignment is to prepare an accrual basis report of sales along with detailing the cost...

The assignment is to prepare an accrual basis report of sales along with detailing the cost of goods sold.

SPC Flash Drive Company

September Report

Net Sales:

$

Minus cost of goods sold:

Beginning inventory

$

Add purchases

$                     .

Goods available for sale

$

Subtract ending inventory

$

Cost of goods sold

$                      .

Net Income (Gross Profit)

$

Case Study Specific

In September, the SPC Flash Drive Company had the following transactions relating to sales and cost of goods sold:

  1. The company sold 2891 flash drives during the month of September:
    1. Model 1 gig ( 1621 @ $1.65 each)
    2. Model 4 gig ( 376 @ $ 4.21 each)
    3. Model 8 gig (301 @ $ 7.56)
    4. Model 16 gig (175 @ $14.95)
    5. Model 32 gig (223 @ $29.09)
    6. Model 64 gig (195 @ $ 49.99)

  1. Beginning Inventory on September 1 was:
    1. Model 1 gig ( 3200 @ $.59 each)
    2. Model 4 gig ( 845 @ $ 1.45 each)
    3. Model 8 gig (900 @ $ 2.56)
    4. Model 16 gig (550 @ $ 4.90)
    5. Model 32 gig (700 @ $9.33)
    6. Model 64 gig (400 @ $ 17.25)

  1. Purchased during the month of September was:
    1. Model 1 gig ( 1600 @ $.59 each)
    2. Model 4 gig ( 800 @ $ 1.45 each)
    3. Model 8 gig (300 @ $ 2.56)
    4. Model 16 gig (200 @ $ 4.90)
    5. Model 32 gig (200 @ $9.33)
    6. Model 64 gig (200 @ $ 17.25)

  1. Ending Inventory on September 30:
    1. Model 1 gig ( ________ @ $.59 each)
    2. Model 4 gig ( ________ @ $ 1.45 each)
    3. Model 8 gig (_________ @ $ 2.56)
    4. Model 16 gig ( _________ @ $ 4.90)
    5. Model 32 gig (__________ @ $9.33)
    6. Model 64 gig (__________ @ $ 17.25)

Solutions

Expert Solution

Calculations are shown in the table below. Information filled from the question above. Formula used in the sheet are as follows (column names are used in the formula below)

Net Sales = Units Sold * Sale Rate

Begin Inv Value = Beg Inv Units * Inv Rate

Purchase Inv Value = Purchase Inv Units * Purchase Inv Rate

Inventory available for Sale = Begin Inv Units + Purchase Inv Units

Goods available for Sale Value = Begin Inv Value + Purchase Inv Value

Ending Inventory Units = Inventory available for Sale - Units Sold

Ending Inventory Value = Ending Inventory Units * Purchase Inv Rate

Cost of Goods Sold = Goods available for Sale Value - Ending Inventory Value

Net Income = Net Sales - Cost of Goods Sold

Model Units Sold Sale Rate Net Sales Begin Inv Units Inv Rate Begin Inv Value Purchase Inv Unit Purchase Inv Rate Purchase Inv Value Inventory Available for Sale Goods Available for Sale Value Ending Inventory Units Ending Inv Value Cost of Goods Sold Net Income
Model 1 gig 1,621 $1.65 $2,674.65 3,200 $0.59 $1,888.00 1,600 $0.59 $944.00 4,800 $2,832.00 3,179 $1,875.61 $956.39 $1,718.26
Model 4 gig 376 $4.21 $1,582.96 845 $1.45 $1,225.25 800 $1.45 $1,160.00 1,645 $2,385.25 1,269 $1,840.05 $545.20 $1,037.76
Model 8 gig 301 $7.56 $2,275.56 900 $2.56 $2,304.00 300 $2.56 $768.00 1,200 $3,072.00 899 $2,301.44 $770.56 $1,505.00
Model 16 gig 175 $14.95 $2,616.25 550 $4.90 $2,695.00 200 $4.90 $980.00 750 $3,675.00 575 $2,817.50 $857.50 $1,758.75
Model 32 gig 223 $29.09 $6,487.07 700 $9.33 $6,531.00 200 $9.33 $1,866.00 900 $8,397.00 677 $6,316.41 $2,080.59 $4,406.48
Model 64 gig 195 $49.99 $9,748.05 400 $17.25 $6,900.00 200 $17.25 $3,450.00 600 $10,350.00 405 $6,986.25 $3,363.75 $6,384.30
Total $25,384.54 $21,543.25 $9,168.00 $30,711.25 $22,137.26 $8,573.99 $16,810.55

Hence, by picking value from the table

  1. Model 1 gig ( 3719 @ $.59 each)
  2. Model 4 gig ( 1269 @ $ 1.45 each)
  3. Model 8 gig (899 @ $ 2.56)
  4. Model 16 gig ( 575 @ $ 4.90)
  5. Model 32 gig (677 @ $9.33)
  6. Model 64 gig (405 @ $ 17.25)

And,

September Report

Net Sales:

$25,384.54

Minus cost of goods sold:

Beginning inventory

$21,543.25

Add purchases

$9,168.00

Goods available for sale

$30,711.25

Subtract ending inventory

$22,137.26

Cost of goods sold

$8,573.99

Net Income (Gross Profit)

$16,810.55


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