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In October, Nicole eliminated all existing inventory of cosmetic items. The trouble of ordering and tracking each product line had exceeded the profits earned. In December, a supplier asked her to sell a prepackaged spa kit. Feeling she could manage a single product line, Nicole agreed. Nicole's Getaway Spa (NGS) would make monthly purchases from the supplier at a cost that included production costs and a transportation charge. NGS would keep track of its new inventory using a perpetual inventory system. On December 31, NGS purchased 10 units at a total cost of $7.10 per unit. Nicole purchased 50 more units at $8.70 in February. In March, Nicole purchased 20 units at $10.70 per unit. In May, 60 units were purchased at $10.50 per unit. In June, NGS sold 60 units at a selling price of $12.70 per unit and 50 units at $10.70 per unit.

In October, Nicole eliminated all existing inventory of cosmetic items. The trouble of ordering and tracking each product line had exceeded the profits earned. In December, a supplier asked her to sell a prepackaged spa kit. Feeling she could manage a single product line, Nicole agreed. Nicole's Getaway Spa (NGS) would make monthly purchases from the supplier at a cost that included production costs and a transportation charge. NGS would keep track of its new inventory using a perpetual inventory system. On December 31, NGS purchased 10 units at a total cost of $7.10 per unit. Nicole purchased 50 more units at $8.70 in February. In March, Nicole purchased 20 units at $10.70 per unit. In May, 60 units were purchased at $10.50 per unit. In June, NGS sold 60 units at a selling price of $12.70 per unit and 50 units at $10.70 per unit.

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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In October, Nicole eliminated all existing inventory of cosmetic items. The trouble of ordering and tracking each product line had exceeded the profits earned. In December, a supplier asked her to sell a prepackaged spa kit. Feeling she could manage a single product line, Nicole agreed. Nicole's Getaway Spa (NGS) would make monthly purchases from the supplier at a cost that included production costs and a transportation charge. NGS would keep track of its new inventory using a perpetual inventory system. On December 31, NGS purchased 10 units at a total cost of $7.10 per unit. Nicole purchased 50 more units at $8.70 in February. In March, Nicole purchased 20 units at $10.70 per unit. In May, 60 units were purchased at $10.50 per unit. In June, NGS sold 60 units at a selling price of $12.70 per unit and 50 units at $10.70 per unit.
Transcribed Image Text:In October, Nicole eliminated all existing inventory of cosmetic items. The trouble of ordering and tracking each product line had exceeded the profits earned. In December, a supplier asked her to sell a prepackaged spa kit. Feeling she could manage a single product line, Nicole agreed. Nicole's Getaway Spa (NGS) would make monthly purchases from the supplier at a cost that included production costs and a transportation charge. NGS would keep track of its new inventory using a perpetual inventory system. On December 31, NGS purchased 10 units at a total cost of $7.10 per unit. Nicole purchased 50 more units at $8.70 in February. In March, Nicole purchased 20 units at $10.70 per unit. In May, 60 units were purchased at $10.50 per unit. In June, NGS sold 60 units at a selling price of $12.70 per unit and 50 units at $10.70 per unit.
2. Compute the Cost of Goods Available for Sale, Cost of Goods Sold, and Cost of Ending Inventory using the first-in, first-out (FIFO) method. (Round "Cost per Unit" to 2 decimal places.) FIFO (Perpetual) Beginning Inventory Purchases February March May Net Purchases Goods Available for Sale Cost of Goods Sold Units from Beginning Inventory Units from February Purchase Units from March Purchase Units from May Purchase Total Cost of Goods Sold Ending Inventory Units Numerator Denominator 0 0 Cost per Unit Total Inventory Turnover Ratio Cost of Goods Sold Average Inventory S 0 0 3. Calculate the inventory turnover ratio, using the inventory purchased on December 31 as the beginning inventory. (Round your answers to 2 decimal places.) 0 0
Transcribed Image Text:2. Compute the Cost of Goods Available for Sale, Cost of Goods Sold, and Cost of Ending Inventory using the first-in, first-out (FIFO) method. (Round "Cost per Unit" to 2 decimal places.) FIFO (Perpetual) Beginning Inventory Purchases February March May Net Purchases Goods Available for Sale Cost of Goods Sold Units from Beginning Inventory Units from February Purchase Units from March Purchase Units from May Purchase Total Cost of Goods Sold Ending Inventory Units Numerator Denominator 0 0 Cost per Unit Total Inventory Turnover Ratio Cost of Goods Sold Average Inventory S 0 0 3. Calculate the inventory turnover ratio, using the inventory purchased on December 31 as the beginning inventory. (Round your answers to 2 decimal places.) 0 0
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