Answered: Cost of Goods Available for Sale Cost…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter5: Accounting For Retail Businesses

Section: Chapter Questions

Problem 43E: Cost of goods sold Based on the following data, determine the cost of goods sold for July:

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Question

100%

Altira Corporation provides the following information related to its inventory during the month of August 2024:

August 1	Inventory on hand—2,400 units; cost $6.50 each.
August 8	Purchased 12,000 units for $5.90 each.
August 14	Sold 9,600 units for $12.40 each.
August 18	Purchased 7,200 units for $5.40 each.
August 25	Sold 8,600 units for $11.40 each.
August 28	Purchased 4,400 units for $5.80 each.
August 31	Inventory on hand—7,800 units.

Using calculations based on a perpetual inventory system, determine the inventory balance Altira would report in its August 31, 2024, balance sheet and the cost of goods sold it would report in its August 2024 income statement using last-in, first-out (LIFO).

Cost of Goods Available for Sale
Cost of Goods Sold - August 14
Cost of Goods Sold - August 25
Inventory Balance
Perpetual LIFO:
Number
of units
Cost
per
unit
Cost
Cost of Goods
Available for Sale
Number of Cost
units sold per unit Goods Sold
Cost of
Number of
units sold
per
unit
Cost of
Goods Sold
Total Cost of
Goods Sold
Number of
units in ending
inventory
Cost per
unit
Ending
Inventory
Beginning Inventory
2,400 $6.50 $
15,600
$ 6.50 $
00
$ 6.50
$
0
$ 6.50
Purchases:
August 8
12,000
5.90
70,800
9,600
5.90
56,6400
5.90
5.90
August 18
7,200
5.40
38,880
5.40
00
5.40
5.40
August 28
4,400
5.80
25,520
5.80
00
5.80
5.80
Total
26,000
$
150,800
9,600
$
56,6400
$
0 $
56,640

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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