## Educational Content: Inventory System Analysis### Background InformationHemming uses a perpetual inventory system. The tasks are to:1. Determine the costs assigned to ending inventory and the cost of goods sold using FIFO (First-In, First-Out).2. Determine the costs assigned to ending inventory and the cost of goods sold using LIFO (Last-In, First-Out).3. Compute the gross margin for FIFO and LIFO methods.### Data TableThe table provided includes information about inventory activities, showcasing initial inventory levels, purchases, and sales with respective costs.#### Overview of Data- **Activities:** - **Beginning Inventory:** 300 units at $14.00 - **Purchases:** - January 10: 250 units at $14.00 - March 14: 520 units at $19.00 - July 30: 500 units at $24.00 - October 26: 200 units at $29.00 - **Sales:** - March 15: 50 units at $24.00 - October 5: 480 units at $44.00- **Cost/Sales Data:** - Total costs add up to $31,880 for 1,520 units. - Total sold units: 1,190 units at differing retail prices.### FIFO Analysis (First-In, First-Out)The "Perpetual FIFO" schedule displays step-by-step computations for determining the costs associated with goods sold and ending inventory under the FIFO method. #### Schedule Explanation1. **January 10 Sale:** Cost of 250 units (first from beginning inventory) at $14 per unit = $3,500.2. **March 14 Purchase:** 520 new units at $19 each.3. **March 15 Sale:** Sells 50 units at $19 (newly purchased).4. **July 30 Purchase:** 500 new units at $24 each.5. **October 5 Sale:** Sells 480 units, charged as 110 from March 14 ($19 each), 370 from July 30 ($24 each).6. **October 26 Purchase:** 200 units at $29 each.7. **End Balance:** Totals an inventory balance of $1,820 with the latest batches considered.#### Financial Totals for FIFO- Cost of Goods Sold: $

1. Computation of ending inventory and Cost of Goods sold under FIFO (Perpetual) Date Goods…

Answered: Date Activities Units Acquired at Cost…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Date Activities Units Acquired at Cost Units Sold at Retail April 1 Beginning inventory 175 units @ $15 = $2,625 April 4 Purchase 150 units @ $16 = $2,400 April 7 Sales 160 units @ $30 April 10 Purchase 200 units @ $17 = $3,400 April 16 Sales 250 units @ $30 April 25 Purchase 160 units @ $18 = $2,880 April 28 Sales 150 units @ $32 A. Determine the cost assigned to ending inventory and cost of goods sold using FIFO. B. Determine the cost assigned to ending inventory and cost of goods sold using LIFO
Date Activities Units Acquired at Cost Units Sold at Retail January 1 Beginning inventory 40 units @ $2 = $ 80 January 3 Sales 30 units @ $8 February 14 Purchase 70 units @ $3 = $ 210 February 15 Sales 60 units @ $8 June 30 Purchase 90 units @ $4 = $ 360 November 6 Sales 86 units @ $8 November 19 Purchase 20 units @ $5 = $ 100 Totals 220 units $ 750 176 units record a journal entry worksheet
Activities Beginning inventory Tree Seedlings has the following current-year purchases and sales for its only product. Date January 1 Units Acquired at Cost Units Sold at Retail 150 units @ $2 = $ 300 January 31 Sales 106 units @ $ 8 February 14 February 15 Purchase Sales 228 units June 30 November 6 November 19 Purchase Sales Purchase Totals 200 units 64 units 642 units @ $3 = $ 684 @ $4 = $ 800 170 units @ $ 8 152 units @ $ 8 @ $5 = $320 $ 428 units 2,104 The company uses a periodic inventory system. a. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. b. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO. c. Compute the gross profit for each method. tes Complete this question by entering your answers in the tabs below. Required A Required B Required C Determine the costs assigned to ending inventory and to cost of goods sold using FIFO. Periodic Inventory System Ending Inventory Cost of Goods Sold FIFO
%24 %24 CDOOK Cost Flow Methods The following three identical units of Item JC07 are purchased during April: Item Beta Units Cost April 2 Purchase 1 $317 April 15 Purchase 1 318 April 20 Purchase 1 319 Total $954 Average cost per unit $318 ($954 3 units) Assume that one unit is sold on April 27 for $439. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method. Gross Profit Ending Inventory a. First-in, first-out (FIFO) %$4 $4 b. Last-in, first-out (LIFO) c. Weighted average cost
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Date Activities Units Acquired at Cost 10 units @ $25 = $250 15 units @ $28 = $420 Units Sold August 2 August 18 August 29 August 31 Purchase Purchase Sales 20 unit Purchase 14 units @ $29 = $406 What is the per unit value of ending inventory on August 31? Answers should be rounded to the nearest cent. Multiple Choice $28.42 $26.80 $29.00 $25.00 O $30.35
Question 7 ZZ Company employs a periodic inventory system and sells its inventory to customers for $39 per unit. ZZ Company had the following inventory information available for June: June 1 Beginning inventory 1,100 units @ $22.10 cost per unit June 6 Purchased 3,400 units @ $16.40 cost per unit June 11 Sold 3,000 units June 15 June 19 June 23 Purchased 1,300 units @ $33.60 cost per unit Sold 1,200 units Purchase 3,700 units @ $20.70 cost per unit Sold 3,600 units June 26 June 28 Purchased 2,500 units @ $28.20 cost per unit During June, ZZ Company reported operating expenses of $18,000 and had an income tax rate of 36%. Calculate the amount of net income shown on ZZ Company's income statement for June using the FIFO method.
Given the following: FIFO method: 16 units left in inventory Jan 1 Beginning inventory 9 units at $105 = $945 April 13 Purchased 14 units at $120 = $1,680 Sept. 17 Purchased 20 units at $130 = $2,600 Dec. 10 Purchased 14 units at $140 = $1,960 The cost of goods sold is: A. None of these B. $4,965 C. $5,225 D. $10,000 E. $5,000

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