Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method. To calculate: Cost of goods sold and cost assigned to ending inventory using specific identification methods for L Company.

Question

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 5, Problem 14E

a.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To calculate: Cost of goods sold and cost assigned to ending inventory using specific identification methods for L Company.

a.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

Explanation of Solution

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 150 units will consist

Particular	Units	Per unit ($)	Amount ($)
7^t^h May	50	2.90	145
28^t^h July	50	2.80	140
3^r^d October	50	2.50	125
Total	150		410

Cost of goods sold:

Cost of goods sold= Goods Available- Ending =$3,855-$410= $3,445

Thus, ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

b.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using weighted average method for L Company.

b.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

Explanation of Solution

Calculating the assigned amount of ending inventory according to weighted average method:

Weighted average cost is calculated as:

=Total cost of goods available for saleNumber of unit available

=$3,8551500=$2.57

Ending inventory=150×$2.57=$385.50

Cost of goods sold= Goods Available- Ending =$3,855-$385.50= $3,469.50

Thus, cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

c.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using FIFO methods for L Company.

c.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420

Explanation of Solution

Cost assigned to ending inventory for the company L using FIFO :

Using FIFO method closing inventory of 150 units will consist:

Ending Inventory= 150×$2.90=$435

Cost of goods sold:

Particular	Units	Per unit ($)	Amount ($)
1^s^t Jan	96	2	192
7^t^h May	220	2.25	495
28^t^h July	544	2.5	1360
3^r^d Oct	480	2.8	1344
19^t^h Dec	10	2.9	29
Total			3420

Thus, cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420.

d.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using LIFO methods for L Company.

d.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using LIFO method is $313.50 and of cost of goods sold is $3541.5 and FIFO method of assigning cost to inventory will yield highest net income as cost of goods cold is lowest in it.

Explanation of Solution

Calculating the assigned amount of ending inventory according to LIFO method:

Particular	Units	Per unit ($)	Amount ($)
1^s^t Jan	96	2	192
7^t^h may	54	2.25	121.50
Total			313.50

Cost of goods sold:

Particular	Units	Per unit ($)	Amount ($)
7^t^h May	166	2.25	373.5
28^t^h July	544	2.5	1360
3^r^d Oct	480	2.8	1344
19^t^h Dec	160	2.9	464
Total			3541.5

Thus, cost assigned to ending inventory using LIFO method is $313.50 and cost of goods sold is $3541.5.

FIFO method of assigning cost to inventory will yield highest Net income as cost of goods cold is lowest in it.

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Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's assets, Liabilities, and Equity?

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 5, Problem 14E

a.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To calculate: Cost of goods sold and cost assigned to ending inventory using specific identification methods for L Company.

a.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

Explanation of Solution

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 150 units will consist

Particular	Units	Per unit ($)	Amount ($)
7^t^h May	50	2.90	145
28^t^h July	50	2.80	140
3^r^d October	50	2.50	125
Total	150		410

Cost of goods sold:

Cost of goods sold= Goods Available- Ending =$3,855-$410= $3,445

Thus, ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

b.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using weighted average method for L Company.

b.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

Explanation of Solution

Calculating the assigned amount of ending inventory according to weighted average method:

Weighted average cost is calculated as:

=Total cost of goods available for saleNumber of unit available

=$3,8551500=$2.57

Ending inventory=150×$2.57=$385.50

Cost of goods sold= Goods Available- Ending =$3,855-$385.50= $3,469.50

Thus, cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

c.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using FIFO methods for L Company.

c.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420

Explanation of Solution

Cost assigned to ending inventory for the company L using FIFO :

Using FIFO method closing inventory of 150 units will consist:

Ending Inventory= 150×$2.90=$435

Cost of goods sold:

Particular	Units	Per unit ($)	Amount ($)
1^s^t Jan	96	2	192
7^t^h May	220	2.25	495
28^t^h July	544	2.5	1360
3^r^d Oct	480	2.8	1344
19^t^h Dec	10	2.9	29
Total			3420

Thus, cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420.

d.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using LIFO methods for L Company.

d.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using LIFO method is $313.50 and of cost of goods sold is $3541.5 and FIFO method of assigning cost to inventory will yield highest net income as cost of goods cold is lowest in it.

Explanation of Solution

Calculating the assigned amount of ending inventory according to LIFO method:

Particular	Units	Per unit ($)	Amount ($)
1^s^t Jan	96	2	192
7^t^h may	54	2.25	121.50
Total			313.50

Cost of goods sold:

Particular	Units	Per unit ($)	Amount ($)
7^t^h May	166	2.25	373.5
28^t^h July	544	2.5	1360
3^r^d Oct	480	2.8	1344
19^t^h Dec	160	2.9	464
Total			3541.5

Thus, cost assigned to ending inventory using LIFO method is $313.50 and cost of goods sold is $3541.5.

FIFO method of assigning cost to inventory will yield highest Net income as cost of goods cold is lowest in it.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 5, Problem 14E

a.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To calculate: Cost of goods sold and cost assigned to ending inventory using specific identification methods for L Company.

a.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

Explanation of Solution

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 150 units will consist

Particular	Units	Per unit ($)	Amount ($)
7^t^h May	50	2.90	145
28^t^h July	50	2.80	140
3^r^d October	50	2.50	125
Total	150		410

Cost of goods sold:

Cost of goods sold= Goods Available- Ending =$3,855-$410= $3,445

Thus, ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

b.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using weighted average method for L Company.

b.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

Explanation of Solution

Calculating the assigned amount of ending inventory according to weighted average method:

Weighted average cost is calculated as:

=Total cost of goods available for saleNumber of unit available

=$3,8551500=$2.57

Ending inventory=150×$2.57=$385.50

Cost of goods sold= Goods Available- Ending =$3,855-$385.50= $3,469.50

Thus, cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

c.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using FIFO methods for L Company.

c.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420

Explanation of Solution

Cost assigned to ending inventory for the company L using FIFO :

Using FIFO method closing inventory of 150 units will consist:

Ending Inventory= 150×$2.90=$435

Cost of goods sold:

Particular	Units	Per unit ($)	Amount ($)
1^s^t Jan	96	2	192
7^t^h May	220	2.25	495
28^t^h July	544	2.5	1360
3^r^d Oct	480	2.8	1344
19^t^h Dec	10	2.9	29
Total			3420

Thus, cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420.

d.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using LIFO methods for L Company.

d.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using LIFO method is $313.50 and of cost of goods sold is $3541.5 and FIFO method of assigning cost to inventory will yield highest net income as cost of goods cold is lowest in it.

Explanation of Solution

Calculating the assigned amount of ending inventory according to LIFO method:

Particular	Units	Per unit ($)	Amount ($)
1^s^t Jan	96	2	192
7^t^h may	54	2.25	121.50
Total			313.50

Cost of goods sold:

Particular	Units	Per unit ($)	Amount ($)
7^t^h May	166	2.25	373.5
28^t^h July	544	2.5	1360
3^r^d Oct	480	2.8	1344
19^t^h Dec	160	2.9	464
Total			3541.5

Thus, cost assigned to ending inventory using LIFO method is $313.50 and cost of goods sold is $3541.5.

FIFO method of assigning cost to inventory will yield highest Net income as cost of goods cold is lowest in it.

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 5, Problem 14E

a.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To calculate: Cost of goods sold and cost assigned to ending inventory using specific identification methods for L Company.

a.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

Explanation of Solution

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 150 units will consist

Particular	Units	Per unit ($)	Amount ($)
7^t^h May	50	2.90	145
28^t^h July	50	2.80	140
3^r^d October	50	2.50	125
Total	150		410

Cost of goods sold:

Cost of goods sold= Goods Available- Ending =$3,855-$410= $3,445

Thus, ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

b.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using weighted average method for L Company.

b.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

Explanation of Solution

Calculating the assigned amount of ending inventory according to weighted average method:

Weighted average cost is calculated as:

=Total cost of goods available for saleNumber of unit available

=$3,8551500=$2.57

Ending inventory=150×$2.57=$385.50

Cost of goods sold= Goods Available- Ending =$3,855-$385.50= $3,469.50

Thus, cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

c.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using FIFO methods for L Company.

c.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420

Explanation of Solution

Cost assigned to ending inventory for the company L using FIFO :

Using FIFO method closing inventory of 150 units will consist:

Ending Inventory= 150×$2.90=$435

Cost of goods sold:

Particular	Units	Per unit ($)	Amount ($)
1^s^t Jan	96	2	192
7^t^h May	220	2.25	495
28^t^h July	544	2.5	1360
3^r^d Oct	480	2.8	1344
19^t^h Dec	10	2.9	29
Total			3420

Thus, cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420.

d.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using LIFO methods for L Company.

d.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using LIFO method is $313.50 and of cost of goods sold is $3541.5 and FIFO method of assigning cost to inventory will yield highest net income as cost of goods cold is lowest in it.

Explanation of Solution

Calculating the assigned amount of ending inventory according to LIFO method:

Particular	Units	Per unit ($)	Amount ($)
1^s^t Jan	96	2	192
7^t^h may	54	2.25	121.50
Total			313.50

Cost of goods sold:

Particular	Units	Per unit ($)	Amount ($)
7^t^h May	166	2.25	373.5
28^t^h July	544	2.5	1360
3^r^d Oct	480	2.8	1344
19^t^h Dec	160	2.9	464
Total			3541.5

Thus, cost assigned to ending inventory using LIFO method is $313.50 and cost of goods sold is $3541.5.

FIFO method of assigning cost to inventory will yield highest Net income as cost of goods cold is lowest in it.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 5, Problem 14E

a.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To calculate: Cost of goods sold and cost assigned to ending inventory using specific identification methods for L Company.

a.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

Explanation of Solution

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 150 units will consist

Particular	Units	Per unit ($)	Amount ($)
7^t^h May	50	2.90	145
28^t^h July	50	2.80	140
3^r^d October	50	2.50	125
Total	150		410

Cost of goods sold:

Cost of goods sold= Goods Available- Ending =$3,855-$410= $3,445

Thus, ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

b.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using weighted average method for L Company.

b.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

Explanation of Solution

Calculating the assigned amount of ending inventory according to weighted average method:

Weighted average cost is calculated as:

=Total cost of goods available for saleNumber of unit available

=$3,8551500=$2.57

Ending inventory=150×$2.57=$385.50

Cost of goods sold= Goods Available- Ending =$3,855-$385.50= $3,469.50

Thus, cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

c.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using FIFO methods for L Company.

c.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420

Explanation of Solution

Cost assigned to ending inventory for the company L using FIFO :

Using FIFO method closing inventory of 150 units will consist:

Ending Inventory= 150×$2.90=$435

Cost of goods sold:

Particular	Units	Per unit ($)	Amount ($)
1^s^t Jan	96	2	192
7^t^h May	220	2.25	495
28^t^h July	544	2.5	1360
3^r^d Oct	480	2.8	1344
19^t^h Dec	10	2.9	29
Total			3420

Thus, cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420.

d.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using LIFO methods for L Company.

d.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using LIFO method is $313.50 and of cost of goods sold is $3541.5 and FIFO method of assigning cost to inventory will yield highest net income as cost of goods cold is lowest in it.

Explanation of Solution

Calculating the assigned amount of ending inventory according to LIFO method:

Particular	Units	Per unit ($)	Amount ($)
1^s^t Jan	96	2	192
7^t^h may	54	2.25	121.50
Total			313.50

Cost of goods sold:

Particular	Units	Per unit ($)	Amount ($)
7^t^h May	166	2.25	373.5
28^t^h July	544	2.5	1360
3^r^d Oct	480	2.8	1344
19^t^h Dec	160	2.9	464
Total			3541.5

Thus, cost assigned to ending inventory using LIFO method is $313.50 and cost of goods sold is $3541.5.

FIFO method of assigning cost to inventory will yield highest Net income as cost of goods cold is lowest in it.

Answer 6

Chapter 5, Problem 14E

a.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To calculate: Cost of goods sold and cost assigned to ending inventory using specific identification methods for L Company.

a.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

Explanation of Solution

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 150 units will consist

Particular	Units	Per unit ($)	Amount ($)
7^t^h May	50	2.90	145
28^t^h July	50	2.80	140
3^r^d October	50	2.50	125
Total	150		410

Cost of goods sold:

Cost of goods sold= Goods Available- Ending =$3,855-$410= $3,445

Thus, ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

Answer 7

Chapter 5, Problem 14E

a.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To calculate: Cost of goods sold and cost assigned to ending inventory using specific identification methods for L Company.

Answer 8

a.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

Answer 9

a.

Expert Solution

Answer 10

a.

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 150 units will consist

Particular	Units	Per unit ($)	Amount ($)
7^t^h May	50	2.90	145
28^t^h July	50	2.80	140
3^r^d October	50	2.50	125
Total	150		410

Cost of goods sold:

Cost of goods sold= Goods Available- Ending =$3,855-$410= $3,445

Thus, ending inventory using specific identification method is $410 and cost of goods sold is $3,445.

Answer 13

b.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using weighted average method for L Company.

b.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

Explanation of Solution

Calculating the assigned amount of ending inventory according to weighted average method:

Weighted average cost is calculated as:

=Total cost of goods available for saleNumber of unit available

=$3,8551500=$2.57

Ending inventory=150×$2.57=$385.50

Cost of goods sold= Goods Available- Ending =$3,855-$385.50= $3,469.50

Thus, cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

Answer 14

b.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using weighted average method for L Company.

Answer 15

b.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

Answer 16

b.

Expert Solution

Answer 17

b.

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

Calculating the assigned amount of ending inventory according to weighted average method:

Weighted average cost is calculated as:

=Total cost of goods available for saleNumber of unit available

=$3,8551500=$2.57

Ending inventory=150×$2.57=$385.50

Cost of goods sold= Goods Available- Ending =$3,855-$385.50= $3,469.50

Thus, cost assigned to ending inventory using weighted average method is $385.5 and cost of goods sold is $3,469.50.

Answer 20

c.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using FIFO methods for L Company.

c.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420

Explanation of Solution

Cost assigned to ending inventory for the company L using FIFO :

Using FIFO method closing inventory of 150 units will consist:

Ending Inventory= 150×$2.90=$435

Cost of goods sold:

Particular	Units	Per unit ($)	Amount ($)
1^s^t Jan	96	2	192
7^t^h May	220	2.25	495
28^t^h July	544	2.5	1360
3^r^d Oct	480	2.8	1344
19^t^h Dec	10	2.9	29
Total			3420

Thus, cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420.

Answer 21

c.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO, LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using FIFO methods for L Company.

Answer 22

c.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420

Answer 23

c.

Expert Solution

Answer 24

c.

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

Cost assigned to ending inventory for the company L using FIFO :

Using FIFO method closing inventory of 150 units will consist:

Ending Inventory= 150×$2.90=$435

Cost of goods sold:

Particular	Units	Per unit ($)	Amount ($)
1^s^t Jan	96	2	192
7^t^h May	220	2.25	495
28^t^h July	544	2.5	1360
3^r^d Oct	480	2.8	1344
19^t^h Dec	10	2.9	29
Total			3420

Thus, cost assigned to ending inventory using FIFO method is $435 and of cost of goods sold is $3420.

Answer 27

d.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using LIFO methods for L Company.

d.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using LIFO method is $313.50 and of cost of goods sold is $3541.5 and FIFO method of assigning cost to inventory will yield highest net income as cost of goods cold is lowest in it.

Explanation of Solution

Calculating the assigned amount of ending inventory according to LIFO method:

Particular	Units	Per unit ($)	Amount ($)
1^s^t Jan	96	2	192
7^t^h may	54	2.25	121.50
Total			313.50

Cost of goods sold:

Particular	Units	Per unit ($)	Amount ($)
7^t^h May	166	2.25	373.5
28^t^h July	544	2.5	1360
3^r^d Oct	480	2.8	1344
19^t^h Dec	160	2.9	464
Total			3541.5

Thus, cost assigned to ending inventory using LIFO method is $313.50 and cost of goods sold is $3541.5.

FIFO method of assigning cost to inventory will yield highest Net income as cost of goods cold is lowest in it.

Answer 28

d.

Summary Introduction

Introduction:

Inventory is a record of finished goods of a company which the can sell to the customer, work in progress which can be transform into finish good and raw material which is a means of production. Inventory is also classified as current asset in the balance sheet and it is valued by FIFO LIFO, specific identification and weighted average method.

To compute: Cost of goods sold and cost assigned to ending inventory using LIFO methods for L Company.

Answer 29

d.

Expert Solution

Answer to Problem 14E

Cost assigned to ending inventory using LIFO method is $313.50 and of cost of goods sold is $3541.5 and FIFO method of assigning cost to inventory will yield highest net income as cost of goods cold is lowest in it.