Question

In: Accounting

Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies...

Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory’s selling price is $12 per unit. Transactions Unit Cost Units Total Cost Inventory, January 1 $ 4.00 190 $ 760 Sale, January 10 (170 ) Purchase, January 12 4.50 240 1,080 Sale, January 17 (110 ) Purchase, January 26 5.50 70 385 Assuming that for Specific identification method (item 1d) the January 10 sale was from the beginning inventory and the January 17 sale was from the January 12 purchase.

Assuming that for Specific identification method (item 1d) the January 10 sale was from the beginning inventory and the January 17 sale was from the January 12 purchase.

Required:
1.

Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January 31 under each of the following inventory costing methods: (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)

Amount of Goods Available for Sale. Ending Inventory. Cost of Goods Sold

a.Weighted average cost

b.First-in, first-out

c.Last-in, first-out

d.Specific identification

Solutions

Expert Solution

Answer to Part a.

Cost of Goods available for Sale = Beginning Inventory + Cost of Purchases
Cost of Purchases = $1,080 + $385 = $1,465
Cost of Goods available for Sale = $760 + $1,465
Cost of Goods available for Sale = $2,225

Weighted Average Cost per Unit = Cost of Goods available for sale / Units available
Units available = 190 + 240 + 70 = 500 units
Weighted Average Cost per Unit = 2,225 / 500
Weighted Average Cost per Unit = $4.45

Units Sold = 170 + 110 = 280 units
Cost of Goods Sold = 280 * $4.45
Cost of Goods Sold = $1,246

Ending Inventory = Cost of Goods available for Sale – Cost of Goods Sold
Ending Inventory = $2,225 - $1,246
Ending Inventory = $979

Answer to Part b.

Cost of Goods available for Sale = Beginning Inventory + Cost of Purchases
Cost of Purchases = $1,080 + $385 = $1,465
Cost of Goods available for Sale = $760 + $1,465
Cost of Goods available for Sale = $2,225

Units Sold = 170 + 110 = 280 units
Cost of Goods Sold = (190 * $4.00) + (90 * $4.50)
Cost of Goods Sold = $760 + $405
Cost of Goods Sold = $1,165

Ending Inventory = Cost of Goods available for Sale – Cost of Goods Sold
Ending Inventory = $2,225 - $1,165
Ending Inventory = $1,060

Answer to Part c.

Cost of Goods available for Sale = Beginning Inventory + Cost of Purchases
Cost of Purchases = $1,080 + $385 = $1,465
Cost of Goods available for Sale = $760 + $1,465
Cost of Goods available for Sale = $2,225

Units Sold = 170 + 110 = 280 units
Cost of Goods Sold = (70 * $5.50) + (210 * $4.50)
Cost of Goods Sold = $385 + $945
Cost of Goods Sold = $1,330

Ending Inventory = Cost of Goods available for Sale – Cost of Goods Sold
Ending Inventory = $2,225 - $1,330
Ending Inventory = $895

Answer to Part d.

Cost of Goods available for Sale = Beginning Inventory + Cost of Purchases
Cost of Purchases = $1,080 + $385 = $1,465
Cost of Goods available for Sale = $760 + $1,465
Cost of Goods available for Sale = $2,225

Units Sold = 170 + 110 = 280 units
Cost of Goods Sold = (170 * $4.00) + (110 * $4.50)
Cost of Goods Sold = $680 + $495
Cost of Goods Sold = $1,175

Ending Inventory = Cost of Goods available for Sale – Cost of Goods Sold
Ending Inventory = $2,225 - $1,175
Ending Inventory = $1,050


Related Solutions

Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies...
Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory’s selling price is $14 per unit. Transactions Unit Cost Units Total Cost Inventory, January 1 $ 5.00 310 $ 1,550 Sale, January 10 (200 ) Purchase, January...
Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies...
Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory’s selling price is $8 per unit. Transactions Unit Cost Units Total Cost   Inventory, January 1 $ 2.00 200 $ 400   Sale, January 10 (170 )   Purchase, January...
Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies...
Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory’s selling price is $12 per unit. Transactions Unit Cost Units Total Cost Inventory, January 1 $ 4.00 190 $ 760 Sale, January 10 (170 ) Purchase, January...
Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies...
Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory’s selling price is $9 per unit. Transactions Unit Cost Units Total Cost Inventory, January 1 $ 2.50 260 $ 650 Sale, January 10 (200 ) Purchase, January...
4.) Mojo Industries tracks the number of units purchased and sold throughout each accounting period but...
4.) Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the time of each sale, as if it uses a perpetual inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory’s selling price is $10 per unit.   Transactions Unit Cost Units Total Cost   Inventory, January 1 $ 3.50 330 $ 1,155   Sale, January 10 (240 )   Purchase,...
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies...
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the time of each sale, as if it uses a perpetual inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost Beginning inventory, January 1 1,400 $ 50 Transactions during the year: a. Purchase, January 30 2,100 62 b. Sale, March 14 ($100 each) (1,370...
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies...
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions   Units Unit Cost   Beginning inventory, January 1 3,400 $ 50   Transactions during the year:   a. Purchase, January 30 4,700 65   b. Sale, March 14 ($100 each) (3,050...
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies...
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost Beginning inventory, January 1 1,600 $ 45 Transactions during the year: a. Purchase, January 30 2,300 49 b. Sale, March 14 ($100 each) (1,250...
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies...
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions   Units Unit Cost   Beginning inventory, January 1 1,100 $ 50   Transactions during the year:   a. Purchase, January 30 2,150 60   b. Sale, March 14 ($100 each) (750...
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies...
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost Beginning inventory, January 1 3,200 $ 45 Transactions during the year: a. Purchase, January 30 4,550 55 b. Sale, March 14 ($100 each) (2,850...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT