Seals-Navy Surplus Ltd. began October 2017 with 72 tents that cost $22 each. During the month, Seals-Navy Surplus made the following purchases at cost: (Click the icon to view the purchases.) Seals-Navy Surplus sold 319 tents (149 tents on October 22 and 170 tents on October 30), and at October 31 the ending inventory consists of 48 tents. The sale price of each tent was $53. Requirements dollar. (Assume a perpetual inventory control system is used.) Weighted- Average Cost FIFO Ending inventory Cost of goods sold Requirement 2. Explain why cost of goods sold is highest under weighted-average cost. Be specific. (Assume a perpetual inventory control system is used.) Weighted-average cost results in the highest cost of goods sold because (a) the cost of tents is V and (b) weighted-average cost includes the cost of the When costs are rising, these latest inventory costs are the highest and that makes cost of goods sold the under weighted-average cost. Requirement 3. Prepare Seals-Navy Surplus's income statement for October 2017. Report gross profit. Operating expenses totalled $3,750. Seals-Navy Surplus uses the weighted-average costing for inventory. The income tax rate is 30%. (Round income tax expense to the nearest whole dollar.) Seals-Navy Surplus Ltd. Income Statement Purchases For the Month Ended October 31, 2017 October 4 100 tents @ $ 24 = $ 2,400 19 155 tents @ 26 4,030 %3D 25 40 tents @ 27 1,080 Print Done
Seals-Navy Surplus Ltd. began October 2017 with 72 tents that cost $22 each. During the month, Seals-Navy Surplus made the following purchases at cost: (Click the icon to view the purchases.) Seals-Navy Surplus sold 319 tents (149 tents on October 22 and 170 tents on October 30), and at October 31 the ending inventory consists of 48 tents. The sale price of each tent was $53. Requirements dollar. (Assume a perpetual inventory control system is used.) Weighted- Average Cost FIFO Ending inventory Cost of goods sold Requirement 2. Explain why cost of goods sold is highest under weighted-average cost. Be specific. (Assume a perpetual inventory control system is used.) Weighted-average cost results in the highest cost of goods sold because (a) the cost of tents is V and (b) weighted-average cost includes the cost of the When costs are rising, these latest inventory costs are the highest and that makes cost of goods sold the under weighted-average cost. Requirement 3. Prepare Seals-Navy Surplus's income statement for October 2017. Report gross profit. Operating expenses totalled $3,750. Seals-Navy Surplus uses the weighted-average costing for inventory. The income tax rate is 30%. (Round income tax expense to the nearest whole dollar.) Seals-Navy Surplus Ltd. Income Statement Purchases For the Month Ended October 31, 2017 October 4 100 tents @ $ 24 = $ 2,400 19 155 tents @ 26 4,030 %3D 25 40 tents @ 27 1,080 Print Done
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Seals-Navy Surplus Ltd. began October 2017 with 72 tents that cost $22 each. During the month, Seals-Navy Surplus made the following purchases at cost:
(Click the icon to view the purchases.)
Seals-Navy Surplus sold 319 tents (149 tents on October 22 and 170 tents on October 30), and at October 31 the ending inventory consists of 48 tents. The sale price of each tent was $53.
Requirements
dollar. (Assume a perpetual inventory control system is used.)
Weighted-
Average Cost
FIFO
Ending inventory
Cost of goods sold
Requirement 2. Explain why cost of goods sold is highest under weighted-average cost. Be specific. (Assume a perpetual inventory control system is used.)
Weighted-average cost results in the highest cost of goods sold because (a) the cost of tents is
V and (b) weighted-average cost includes the cost of the
When costs are rising, these latest inventory costs are the
highest and that makes cost of goods sold the
under weighted-average cost.
Requirement 3. Prepare Seals-Navy Surplus's income statement for October 2017. Report gross profit. Operating expenses totalled $3,750. Seals-Navy Surplus uses the weighted-average costing for inventory. The income tax rate is 30%. (Round
income tax expense to the nearest whole dollar.)
Seals-Navy Surplus Ltd.
Income Statement
Purchases
For the Month Ended October 31, 2017
October
4
100 tents @ $ 24
= $ 2,400
19
155 tents @
26
4,030
%3D
25
40 tents @
27
1,080
Print
Done
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