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Dover's management is afraid that an error was made when calculating COGS. Most of the calculations have already been checked by the auditors, but management still thinks that one inventory item has not been correctly recorded. They would like you to go back through the inventory calculations for that item to correct any possible mistakes. Currently they show that 7,80o units of item TC178, purchased for $8 each, were on hand at the beginning of the year, that $665,000 worth of TC178 was purchased during the year, that discounts of $3,200 were earned by making early payments on these purchases, and that $5,10o worth of returns were made during the year. The records show that only 7,000 units of the beginning TC178 inventory remained at the end of the year. Dover uses the perpetual LIFO system for calculating inventory. Their inventory transactions for item TC178 for the period are as follows: (NOTE that the vendor provides free shipping on all units of TC178) • At the beginning of the period, 7,800 units of TC178, purchased for $8.00 each, were on hand. • On Jan 15, an additional 23,000 units were purchased for $9.00 each. • On February 28, 21,000 units were sold. • On March 14, an additional 12,000 units were purchased for $11.00 each. • On March 20, a 2.0% cash discount was earned by paying for the March 14 purchase early. • On March 30, 13,600 units were sold. On July 30, 4,300 units were sold. • On August 20, an additional 21,00o0 units were purchased for $14.00 each. • On September 2, 9,000 units were sold. • On December 1, 8,400 units were sold.

Dover's management is afraid that an error was made when calculating COGS. Most of the calculations have already been checked by the auditors, but management still thinks that one inventory item has not been correctly recorded. They would like you to go back through the inventory calculations for that item to correct any possible mistakes. Currently they show that 7,80o units of item TC178, purchased for $8 each, were on hand at the beginning of the year, that $665,000 worth of TC178 was purchased during the year, that discounts of $3,200 were earned by making early payments on these purchases, and that $5,10o worth of returns were made during the year. The records show that only 7,000 units of the beginning TC178 inventory remained at the end of the year. Dover uses the perpetual LIFO system for calculating inventory. Their inventory transactions for item TC178 for the period are as follows: (NOTE that the vendor provides free shipping on all units of TC178) • At the beginning of the period, 7,800 units of TC178, purchased for $8.00 each, were on hand. • On Jan 15, an additional 23,000 units were purchased for $9.00 each. • On February 28, 21,000 units were sold. • On March 14, an additional 12,000 units were purchased for $11.00 each. • On March 20, a 2.0% cash discount was earned by paying for the March 14 purchase early. • On March 30, 13,600 units were sold. On July 30, 4,300 units were sold. • On August 20, an additional 21,00o0 units were purchased for $14.00 each. • On September 2, 9,000 units were sold. • On December 1, 8,400 units were sold.

FINANCIAL ACCOUNTING
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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Intermediate 1 FSR Project Part #1: Inventory Basics Picture has all the info needed to create a journal adjusting entries.  The Adjusting Journal Entries Picture shows the answers which the professer provided regarding Intermediate 1 FSR Project Part #1: Inventory Basics info. 

So, here is what I need  help with, I don't understand how he came up with answers regarding "On March 30, 13,600 units were sold" and On July 30, 4,300 units were sold." If you look at the Adjusting Journal Entries Picture I highlight blue next to the numbers I don't understand how they came about and the price unit as well. Specially Jul-30 the 400 and 3,900 and their price units?

What I struggle with is that I dont know what calculation method used to come up with 1,600, 400, 3900? How did he come ups with these numbers? Show me the calculation method used to come up with these numbers 1,600, 400, 3900 and their price unit as well? I am stuck there. 

Thank You

Intermediate 1 FSR Project Part #1: Inventory Basics Goal: To practice correcting the financial statements for an inventory calculation error. (See Topic Guides A 13, 14, 37, 38). Information: Dover's management is afraid that an error was made when calculating COGS. Most of the calculations have already been checked by the auditors, but management still thinks that one inventory item has not been correctly recorded. They would like you to go back through the inventory calculations for that item to correct any possible mistakes. Currently they show that 7,800 units of item TC178, purchased for $8 each, were on hand at the beginning of the year, that $665,000 worth of TC178 was purchased during the year, that discounts of $3,200 were earned by making early payments on these purchases, and that $5,10o worth of returns were made during the year. The records show that only 7,000 units of the beginning TC178 inventory remained at the end of the year. Dover uses the perpetual LIFO system for calculating inventory. Their inventory transactions for item TC178 for the period are as follows: (NOTE that the vendor provides free shipping on all units of TC178) At the beginning of the period, 7,800 units of TC178, purchased for $8.00 each, were on hand. • On Jan 15, an additional 23,000 units were purchased for $9.0o each. • On February 28, 21,000 units were sold. • On March 14, an additional 12,000 units were purchased for $11.00 each. • On March 20, a 2.0% cash discount was earned by paying for the March 14 purchase early. • On March 30, 13,600 units were sold. • On July 30, 4,300 units were sold. • On August 20, an additional 21,000 units were purchased for $14.00 each. On September 2, 9,000 units were sold. • On December 1, 8,400 units were sold.
Transcribed Image Text:Intermediate 1 FSR Project Part #1: Inventory Basics Goal: To practice correcting the financial statements for an inventory calculation error. (See Topic Guides A 13, 14, 37, 38). Information: Dover's management is afraid that an error was made when calculating COGS. Most of the calculations have already been checked by the auditors, but management still thinks that one inventory item has not been correctly recorded. They would like you to go back through the inventory calculations for that item to correct any possible mistakes. Currently they show that 7,800 units of item TC178, purchased for $8 each, were on hand at the beginning of the year, that $665,000 worth of TC178 was purchased during the year, that discounts of $3,200 were earned by making early payments on these purchases, and that $5,10o worth of returns were made during the year. The records show that only 7,000 units of the beginning TC178 inventory remained at the end of the year. Dover uses the perpetual LIFO system for calculating inventory. Their inventory transactions for item TC178 for the period are as follows: (NOTE that the vendor provides free shipping on all units of TC178) At the beginning of the period, 7,800 units of TC178, purchased for $8.00 each, were on hand. • On Jan 15, an additional 23,000 units were purchased for $9.0o each. • On February 28, 21,000 units were sold. • On March 14, an additional 12,000 units were purchased for $11.00 each. • On March 20, a 2.0% cash discount was earned by paying for the March 14 purchase early. • On March 30, 13,600 units were sold. • On July 30, 4,300 units were sold. • On August 20, an additional 21,000 units were purchased for $14.00 each. On September 2, 9,000 units were sold. • On December 1, 8,400 units were sold.
Adjusting Journal Entries Original Information (from instructions): Beginning Balance Purchases Updated Information (From Table): $62,400 Beginning Balance Purchases $62,400 $665,000 $3,200 $5,100 $633,000 $2,640 $0 Pur Discount Pur Discount Pur Returns Pur Returns $656,700 Net Purchases $719,100 COGAS $56,000 Ending Inventory $663,100 COGS Net Purchases $630,360 $692,760 $81,600 $611,160 COGAS Ending Inv COGS 7,000 @ $8 Correct Information: Inventory Table: Perpetual Date Purchases Cost of Goods Sold Inv Balance BB 7,800 @ $8 23,000 @ $9 $ 207,000 24 62,400 $ 269,400 15-Jan 28-Feb 21,000 @ $9 $ 189,000$ 12,000 @ $11 $ 132,000 Discount @ 2% $(2,640) 80,400 $ 212,400 $ 209,760 80,400 14-Mar 20-Mar 30-Mar 12,000@ $10.78 $ 129,360S $9 $ $9 $ $8 $ 1,600 @ 400 @ 3,900 @ 66,000 62,400 31,200 $ 325,200 $14 $ 126,000 $ 199,200 14,400 $ 3,600 $ 31,200 $ 30-Jul 21,000 @ $14 $ 294,000 20-Aug 2-Sep 9,000 @ 8,400 @ $14 $ 117,600 S $ 611,160 $ 1-Dec 81,600 81,600 $ 633,000 $ 2$ Totals Purch Returns $ 611,160 (2,640) $ Discounts COGS Allowances Correcting Entries Needed: Inventory A/P $25,600 $26,340 COGS $51,940 To record the inventory correction for item TC178. Income Tax Expense Income Tax Payable To record change in taxes due to increase (decrease) in NI caused by the change in COGS $15,582 $15,582 30% * $51,940 = $15,582 decrease in income taxe expense %3D
Transcribed Image Text:Adjusting Journal Entries Original Information (from instructions): Beginning Balance Purchases Updated Information (From Table): $62,400 Beginning Balance Purchases $62,400 $665,000 $3,200 $5,100 $633,000 $2,640 $0 Pur Discount Pur Discount Pur Returns Pur Returns $656,700 Net Purchases $719,100 COGAS $56,000 Ending Inventory $663,100 COGS Net Purchases $630,360 $692,760 $81,600 $611,160 COGAS Ending Inv COGS 7,000 @ $8 Correct Information: Inventory Table: Perpetual Date Purchases Cost of Goods Sold Inv Balance BB 7,800 @ $8 23,000 @ $9 $ 207,000 24 62,400 $ 269,400 15-Jan 28-Feb 21,000 @ $9 $ 189,000$ 12,000 @ $11 $ 132,000 Discount @ 2% $(2,640) 80,400 $ 212,400 $ 209,760 80,400 14-Mar 20-Mar 30-Mar 12,000@ $10.78 $ 129,360S $9 $ $9 $ $8 $ 1,600 @ 400 @ 3,900 @ 66,000 62,400 31,200 $ 325,200 $14 $ 126,000 $ 199,200 14,400 $ 3,600 $ 31,200 $ 30-Jul 21,000 @ $14 $ 294,000 20-Aug 2-Sep 9,000 @ 8,400 @ $14 $ 117,600 S $ 611,160 $ 1-Dec 81,600 81,600 $ 633,000 $ 2$ Totals Purch Returns $ 611,160 (2,640) $ Discounts COGS Allowances Correcting Entries Needed: Inventory A/P $25,600 $26,340 COGS $51,940 To record the inventory correction for item TC178. Income Tax Expense Income Tax Payable To record change in taxes due to increase (decrease) in NI caused by the change in COGS $15,582 $15,582 30% * $51,940 = $15,582 decrease in income taxe expense %3D
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