FINANCIAL ACCT-CONNECT
FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
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Chapter 5, Problem 2PSB

1.

Summary Introduction

Introduction:

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

To calculate: The total cost of goods available for sale and the number of units available for sales.

1.

Expert Solution
Check Mark

Answer to Problem 2PSB

The total cost of goods available for sale is 235,500 and the total number of goods available for sale is 65 units

Explanation of Solution

Cost of goods available for sales and the number of goods available for sales:

    DateParticularUnitRate ($)Total Cost ($)
    1st AprilOpening inventory20300060000
    6th AprilPurchases303500105,000
    17th AprilPurchases5450022,500
    25st AprilPurchases10480048,000
    Total65235,500

So, the total cost of goods available for sale is $23,500 and the total number of goods available for sale is 65 units

2.

Summary Introduction

Introduction:

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

To compute: The number of unit in ending inventory for the company M.

2.

Expert Solution
Check Mark

Answer to Problem 2PSB

The number of units in ending inventory is 5 units.

Explanation of Solution

The number of units in closing inventory is as follows:

  Closing Units= Opening Units+ Units purchased - units sold=20+30+5+10-(35-25)=20+45-60=5 units

The number of units in ending inventory is 5 units

3.

Summary Introduction

Introduction:

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

To compute: The cost assigned to ending inventory for the company M using FIFO, LIFO and weighted average and specific identification.

3.

Expert Solution
Check Mark

Answer to Problem 2PSB

Cost assigned to ending inventory using FIFO is $24,000, using LIFO is $15,000, using weighted average is $ 20000 and specific Identification is $22,500.

Explanation of Solution

  1. Cost assigned to ending inventory for the company A using FIFO :
  2. Using FIFO method closing inventory of 5 units will consist:

      FINANCIAL ACCT-CONNECT, Chapter 5, Problem 2PSB , additional homework tip  1

    Thus, cost assigned to ending inventory using FIFO is $24,000.

  3. Calculating the assigned amount of ending inventory according to LIFO method:
  4.   FINANCIAL ACCT-CONNECT, Chapter 5, Problem 2PSB , additional homework tip  2

Using the LIFO method closing inventory of 5 units will consist

Thus, the cost of assigned to ending inventory using LIFO is $15,000

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

The weighted average cost is calculated as:

    DateParticularNo of unitPriceTotalBalance inventory
    No of unitsPriceTotal
    1st AprilOpening inventory203,00060,000203,00060,000
    6th AprilPurchase303,500105,000503,300165,000
    9th AprilSales(35)3,300(115,500)153,30049,500
    17th AprilPurchase54,50022,500203,60072,000
    25th AprilPurchase104,80048,000304,000120,000
    30th AprilSales(25)4,000(100,000)54,00020,000

Thus, cost assigned to ending inventory of $ 20,000

Cost assigned to total inventory using the specific identification method:

Using specific identification method closing inventory of 5 units will consist

  Ending inventory= 5×$4,500=$22,500

Thus, the cost assigned to ending inventory is $22,500.

4.

Summary Introduction

Introduction:

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

To compute: The gross profit earn by the company is cost assigned to ending inventory for the company A using FIFO,LIFO and weighted average and specific identification.

4.

Expert Solution
Check Mark

Answer to Problem 2PSB

Gross using FIFO methods is $558,500, using LIFO method is $549,500, using weighted average method is $55,4500, and specific identification method is $557,000.

Explanation of Solution

    ParticularFIFOLIFOweighted averageSpecific identification
    Cost of goods available for sale235500235500235500235500
    Less: closing stock 5 units2400015000200,00022500
    Cost of goods sold211,500220,500215,500213,000

Gross profit earned by the company:

    ParticularFIFO methodLIFO methodWeighted average methodSpecific identification method
    Total Sales$770,000$770,000$770,000$770,000
    Less: Cost of goods sold 211,500220,500215,500213,000
    Total$558,500$549,500$554,500557,000

Thus, gross using FIFO methods is $558,500, using the LIFO method is $549,500, using the weighted average method is $554500, and the specific identification method is $557,000.

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Chapter 5 Solutions

FINANCIAL ACCT-CONNECT

Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Prob. 13DQCh. 5 - Prob. 14DQCh. 5 - Prob. 15DQCh. 5 - Prob. 16DQCh. 5 - Prob. 17DQCh. 5 - Prob. 1QSCh. 5 - Prob. 2QSCh. 5 - Prob. 3QSCh. 5 - Prob. 4QSCh. 5 - Prob. 6QSCh. 5 - Prob. 7QSCh. 5 - Prob. 8QSCh. 5 - Prob. 9QSCh. 5 - Prob. 10QSCh. 5 - Prob. 11QSCh. 5 - Refer to the information in QS 5-10 and assume the...Ch. 5 - Prob. 13QSCh. 5 - Prob. 14QSCh. 5 - Prob. 15QSCh. 5 - Prob. 16QSCh. 5 - Prob. 17QSCh. 5 - Identify the inventory costing method best...Ch. 5 - Prob. 19QSCh. 5 - Prob. 20QSCh. 5 - Prob. 21QSCh. 5 - Prob. 22QSCh. 5 - International accounting standards C1 C2 P2 Answer...Ch. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Laker Company reported following January purchases...Ch. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - Prob. 10ECh. 5 - Prob. 11ECh. 5 - Inventory turnover and days sales in inventory A3...Ch. 5 - Periodic: Cost flow assumptions P1 Lopez Company...Ch. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Estimating ending inventory—gross profit method...Ch. 5 - Prob. 1PSACh. 5 - Prob. 2PSACh. 5 - Prob. 3PSACh. 5 - Prob. 5PSACh. 5 - Prob. 6PSACh. 5 - Prob. 7PSACh. 5 - QP Corp. sold 4,000 units of its product at $50...Ch. 5 - Prob. 9PSACh. 5 - Prob. 10PSACh. 5 - Prob. 1PSBCh. 5 - Prob. 2PSBCh. 5 - Prob. 3PSBCh. 5 - Prob. 4PSBCh. 5 - Prob. 5PSBCh. 5 - Prob. 6PSBCh. 5 - Prob. 7PSBCh. 5 - Prob. 8PSBCh. 5 - Prob. 9PSBCh. 5 - Prob. 10PSBCh. 5 - Santana Rey of Business Solutions is evaluating...Ch. 5 - Prob. 5.2SPCh. 5 - Prob. 2BTNCh. 5 - Golf Challenge Corp. is a retail sports store...Ch. 5 - Prob. 4BTNCh. 5 - Prob. 7BTNCh. 5 - Prob. 8BTNCh. 5 - Prob. 9BTN
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