Harry’s Haunting Halloween Decorations (Harry’s) began October with 3,900 units of inflatable yard decorations that cost $40 each. Harry’s uses the Perpetual inventory system. During the month, the company completed these inventory transactions: Date Number of Units Cost per unit 7 Purchased 6,000 $56 8 Sold 4,500 12 Purchased 7,500 $52 16 Sold 9,000 25 Purchased 10,500 $48 29 Sold 13,500 Harry’s sells the inflatable yard decorations for $85 each. Required – Part 1: Complete the Inventory tracking (using the tables on the following page) under the: FIFO Costing Method; and Average Costing Method (Remember: For the unit cost under average costing, round to 2 decimal points. Use this rounded value in your calculations. Ie. if value is $49.6969…use 49.70 for the following sales) Required – Part 2: Once the tables are completed in Part 1, use the information there (and from the question) to fill in the below amounts under each method. FIFO Average Cost a) Ending Inventory – quantity b) Ending Inventory – value ($) c) Cost of goods Sold ($) d) Quantity of units sold e) Sales ($) (to be calculated here) f) Gross Profit ($) (to be calculated here)

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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Harry’s Haunting Halloween Decorations (Harry’s) began October with 3,900 units of inflatable yard decorations that cost $40 each. Harry’s uses the Perpetual inventory system.

During the month, the company completed these inventory transactions:

Date		Number of Units	Cost per unit
7	Purchased	6,000	$56
8	Sold	4,500
12	Purchased	7,500	$52
16	Sold	9,000
25	Purchased	10,500	$48
29	Sold	13,500

Harry’s sells the inflatable yard decorations for $85 each.

Required – Part 1: Complete the Inventory tracking (using the tables on the following page) under the:

FIFO Costing Method; and
Average Costing Method

(Remember: For the unit cost under average costing, round to 2 decimal points. Use this rounded value in your calculations. Ie. if value is $49.6969…use 49.70 for the following sales)

Required – Part 2: Once the tables are completed in Part 1, use the information there (and from the question) to fill in the below amounts under each method.

FIFO

Average Cost

a) Ending Inventory – quantity

b) Ending Inventory – value ($)

c) Cost of goods Sold ($)

d) Quantity of units sold

e) Sales ($) (to be calculated here)

f) Gross Profit ($) (to be calculated here)

Perpetual Inventory Record––FIFO

PURCHASES

COST OF GOODS SOLD

INVENTORY ON HAND

DATE

QTY

UNIT COST

TOTAL COST

QTY

UNIT COST

TOTAL COST

QTY

UNIT COST

TOTAL COST

Oct

	Perpetual Inventory Record––Average Cost

	PURCHASES	COST OF GOODS SOLD	INVENTORY ON HAND
DATE	QTY	UNIT COST	TOTAL COST	QTY	UNIT COST	TOTAL COST	QTY	UNIT COST	TOTAL COST
Oct	1

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