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Name FINANCIAL ACCOUNTING Inventory Costing Case On January 1, 2022, Chris Columbus decided to start a new business, Ahoy Mates, that sells children's toy boats. Each boat is sold for $24. The following purchases were made during 2022. Jan 1 Jan 15 Feb 2 Feb 10 Mar 1 April 4 Items 550 @ 200 @ 900 @ 500 @ 200 @ 750 @ 205 o Cost $10.89 10.80 10.78 11.20 11.45 11.40 11.72

Name FINANCIAL ACCOUNTING Inventory Costing Case On January 1, 2022, Chris Columbus decided to start a new business, Ahoy Mates, that sells children's toy boats. Each boat is sold for $24. The following purchases were made during 2022. Jan 1 Jan 15 Feb 2 Feb 10 Mar 1 April 4 Items 550 @ 200 @ 900 @ 500 @ 200 @ 750 @ 205 o Cost $10.89 10.80 10.78 11.20 11.45 11.40 11.72

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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On January 1, 2022, Chris Columbus decided to start a new business, Ahoy Mates, that sells children's toy boats. Each boat is sold for $24. The following purchases were made during 2022. FINANCIAL ACCOUNTING Inventory Costing Case Name Jan 1 Jan 15 Feb 2 Feb 10 Mar 1 April 4 June 1 a. Aug 14 Nov 15 Dec 6 9. Items 550 @ 200 @ 900 @ 500 @ 200 @ 750 @ 325 @ 475 @ 850 @ 300 @ Cost $10.89 10.80 10.78 11.20 11.45 Ahoy Mates uses a periodic inventory system and has 325 items remaining in inventory. At December 31, Ahoy Mates is trying to determine which inventory costing method he should use. Answer the following questions to help Ahoy Mates determine which method he will adopt for his new business. 1. How many items did Ahoy Mates purchase in 2022? 2. What is the cost of goods purchased by Ahoy Mates in 2022? 3. How many items remain in Ahoy Mates inventory as of December 31? 4. How many items did Ahoy Mates sell in 2022? 11.40 11.72 11.80 12.20 12.32 5. What was Ahoy Mates total sales amount in 2022? 6. Answer the following questions assuming Ahoy Mates uses the weighted average inventory costing method. What is the weighted average cost per unit? (Round to nearest penny) b. What is the value of the ending inventory? c. What is the cost of goods sold? d. What is the gross profit? 7. Answer the following questions assuming Ahoy Mates uses the first in, first out (FIFO) inventory costing method. What is the value of the ending inventory? a. b. What is the cost of goods sold? c. What is the gross profit? 8. Answer the following questions assuming Ahoy Mates uses the last in, first out (LIFO) inventory costing method. What is the value of the ending inventory? a. b. What is the cost of goods sold? C. What is the gross profit? Which method do you recommend and WHY?
Transcribed Image Text:On January 1, 2022, Chris Columbus decided to start a new business, Ahoy Mates, that sells children's toy boats. Each boat is sold for $24. The following purchases were made during 2022. FINANCIAL ACCOUNTING Inventory Costing Case Name Jan 1 Jan 15 Feb 2 Feb 10 Mar 1 April 4 June 1 a. Aug 14 Nov 15 Dec 6 9. Items 550 @ 200 @ 900 @ 500 @ 200 @ 750 @ 325 @ 475 @ 850 @ 300 @ Cost $10.89 10.80 10.78 11.20 11.45 Ahoy Mates uses a periodic inventory system and has 325 items remaining in inventory. At December 31, Ahoy Mates is trying to determine which inventory costing method he should use. Answer the following questions to help Ahoy Mates determine which method he will adopt for his new business. 1. How many items did Ahoy Mates purchase in 2022? 2. What is the cost of goods purchased by Ahoy Mates in 2022? 3. How many items remain in Ahoy Mates inventory as of December 31? 4. How many items did Ahoy Mates sell in 2022? 11.40 11.72 11.80 12.20 12.32 5. What was Ahoy Mates total sales amount in 2022? 6. Answer the following questions assuming Ahoy Mates uses the weighted average inventory costing method. What is the weighted average cost per unit? (Round to nearest penny) b. What is the value of the ending inventory? c. What is the cost of goods sold? d. What is the gross profit? 7. Answer the following questions assuming Ahoy Mates uses the first in, first out (FIFO) inventory costing method. What is the value of the ending inventory? a. b. What is the cost of goods sold? c. What is the gross profit? 8. Answer the following questions assuming Ahoy Mates uses the last in, first out (LIFO) inventory costing method. What is the value of the ending inventory? a. b. What is the cost of goods sold? C. What is the gross profit? Which method do you recommend and WHY?
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