! Required information Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: January 20, purchased 330 units @ $12 = $3,960. April 21, purchased 140 units @ $13 = $1,820. July 25, purchased 250 units @ $ 14 = $3500. September 19, purchased 90 units @ $16 = $1,440. During the year, The Shirt Shop sold 630 T-shirts for $21 each.Exercise 5-5 (Algo) Part a Required a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. Note: Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount. Exercise 5-5 (Algo) Part b b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.

! Required information Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: January 20, purchased 330 units @ $12 = $3,960. April 21, purchased 140 units @ $13 = $1,820. July 25, purchased 250 units @ $ 14 = $3500. September 19, purchased 90 units @ $16 = $1,440. During the year, The Shirt Shop sold 630 T-shirts for $21 each.Exercise 5-5 (Algo) Part a Required a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. Note: Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount. Exercise 5-5 (Algo) Part b b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Required information Exercise 5-4A (Algo) Effect of inventory cost flow (FIFO, LIFO, and weighted average) on gross margin LO 5-1 [The following information applies to the questions displayed below.) The following information pertains to Mason Company for Year 2: Beginning inventory Units purchased) Ending Inventory consisted of 54 units. Mason sold 492 units at $126 each. All purchases and sales were made with cash. Operating expenses amounted to $3.825. Exercise 5-4A (Algo) Part a 140 units@ $42 406 units @ $63 Required a. Compute the gross margin for Mason Company using the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. Note: Round cost per unit to 3 decimal places and final answers to the nearest whole dollar amount. FIFO LIFO Weighted average: Gross Margin
Required information Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: January 20 April 21 July 25 September 19 Purchased 330 units @ $10 = Purchased 80 units @ $11 = Purchased 210 units @ $13 = Purchased 60 units @ $14 = During the year, The Shirt Shop sold 520 T-shirts for $19 each. Exercise 5-5 (Algo) Part b b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions. Gross margin FIFO LIFO $ 3,300 880 2,730 840 Difference
The units of Manganese Plus available for sale during the year were as follows: Mar. 1 Inventory 20 units @ $32 $640 June 16 Purchase 30 units @ $34 1,020 Nov. 28 Purchase 41 units @ $35 1,435 91 units $3,095 There are 11 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the difference in gross profit between the LIFO and FIFO inventory cost systems. Enter the answer as a positive number. FIFO Cost of Goods Sold $fill in the blank 1 LIFO Cost of Goods Sold $fill in the blank 2 Difference fill in the blank 3
Problem 5-20A (Algo) Allocating product costs between cost of goods sold and ending inventory: intermittent purchases and sales of merchandise LO 5-1 Skip to question [The following information applies to the questions displayed below.] Pam’s Creations had the following sales and purchase transactions during Year 2. Beginning inventory consisted of 230 items at $99 each. The company uses the FIFO cost flow assumption and keeps perpetual inventory records. Date Transaction Description March 5 Purchased 290 items @ $109 April 10 Sold 165 items @ $213 June 19 Sold 305 items @ $213 September 16 Purchased 240 items @ $114 November 28 Sold 155 items @ $218 Problem 5-20A (Algo) Part b b. Calculate the gross margin Pam’s Creations would report on the Year 2 income statement. Sales Cost of goods sold Gross margin c. Determine the ending inventory balance Pam’s Creations would report on the December 31, Year 2, balance sheet. Ending inventory
Bramble Company reports the following for the month of June. June 1 (a) 12 23 30 (b) Inventory 290 Purchase 400 Purchase Inventory Units Unit Cost $5 Cost of goods sold 300 130 Cost of the ending inventory Your answer has been saved. See score details after the due date. Compute the cost of the ending inventory and the cost of goods sold under FIFO and LIFO. Save for Later 6 $ 7 in Total Cost $1,450 2,400 2,100 FIFO 910 5040 Which costing method gives the higher ending inventory? 5 $ LIFO 650 5300 Attempts: 1 of 1 used Attempts: 0 of 1 used Submit Answer
The units of Manganese Plus available for sale during the year were as follows: Mar. 1 Inventory 24 units @ $32 $768 June 16 Purchase 30 units @ $35 1,050 Nov. 28 Purchase 38 units @ $39 1,482 92 units $3,300 There are 15 units of the product in the physical inventory at November 30. The periodic inventory system is used. a. Determine the inventory cost by the FIFO method. b. Determine the inventory cost by the LIFO method. c. Determine the inventory cost by the average cost methods. Round answer to two decimal places. %24 %24 %24
Required information Use the following information for the Quick Study below. Trey Monson starts a merchandising business on December 1 and enters into three inventory purchases: Purchases on December 7 15 units @ $18.00 cost Purchases on December 14 29 units @ $27.00 cost Purchases on December 21 25 units @ $32.00 cost QS 5-13 Periodic: Inventory costing with specific identification LO P1 Required:Monson sells 25 units for $45 each on December 15. Of the units sold, 12 are from the December 7 purchase and 13 are from the December 14 purchase and assume the periodic inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on specific identification.
The units of Manganese Plus available for sale during the year were as follows: Mar. 1 Inventory 23 units @ $29 $667 June 16 Purchase 31 units $32 992 Nov. 28 Purchase 39 units @ $37 1,443 93 units $3,102 There are 16 units of the product in the physical inventory at November 30. The periodic inventory system is used. Round answers to the nearest whole dollar. a. Determine the inventory cost by the FIFO method. $4 b. Determine the inventory cost by the LIFO method. c. Determine the inventory cost by the average cost methods.
The units of Manganese Plus available for sale during the year were as follows: Mar. 1 Inventory 25 units @ $29 $725 June 16 Purchase 27 units @ $34 918 Nov. 28 Purchase 44 units @ $36 1,584 96 units $3,227 There are 10 units of the product in the physical inventory at November 30. The periodic inventory system is used. a. Determine the inventory cost by the FIFO method.$fill in the blank 1 b. Determine the inventory cost by the LIFO method.$fill in the blank 2 c. Determine the inventory cost by the average cost methods. Round answer to two decimal places.$fill in the blank 3
Concept Videos i es Required information UNIT 30s $45 May 1 April 5 April 10 April 15 April 201 April 22 # Knowledge Check 01 Assume that we use a perpetual inventory system and that five identical units are purchased at the following four dates and costs: 3 $ 10 $ 12 0:00-0:54 $14 $16 - $17 Cost of the ending inventory $ One unit is sold on April 25. The company uses the weighted average inventory costing method. Identify the cost of the ending inventory on the balance sheet. Note: Round your answer to 2 decimal places. 4 % 5 H 6 In
C. Explain sômé ol lhe ais2 store. Explorer Scopes sells state-of-the-art relescopes to individuais and organizations interested in studying the solar systern At December 31 last year, the company's inventory amounted to $120,000. During the first week of January this year, the company made only one purchase and one sale. These transactions were as follows: PROBLEM 5.5 Çomparison of Inventory Systems LO 3, 4, 5 Sold one telescope costing S37,200 to Central State University for cash. $62,000. Purchased merchandise on account from Lunar Optics, $80,000. Terms, net 30 days. Jan. 2 Jan. 5 Instructions a. Prepare joumal entries to record these transactions. assuming that Explorer Scopes uses the perpetual inventory system. Use separate entries to record the sales revenue and the cost of goods sold for the sale on January 2. b. Compute the balance of the Inventory account on January 7. c. Prepare journal entries to record the two transactions, assuming that Explorer Scopes uses the periodic…
Required information Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: Purchased 400 units @ $4 = Purchased 90 units $5 = $ 1,600 450 January 20 April 21 July 25 September 19 Purchased 250 units @ $7 = Purchased 60 units @ $9 = During the year, The Shirt Shop sold 650 T-shirts for $14 each. Exercise 5-5 (Algo) Part a Required a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. Note: Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount. Ending inventory FIFO $ LIFO 450 1,750 540 Weighted Average