Inventory: Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business. Perpetual Inventory System: In perpetual inventory system there is a continuous recording of transactions as and when they take place that is purchase and sale transactions are recorded whenever they occur. Cost of Goods Available for Sale: It basically includes the cost of inventory which is ready for sale within an accounting period. It mainly includes the cost of beginning inventory as well as the stock purchased in that year and the production within that period (if any). Cost of Goods Sold: Cost of goods sold is the total expenses or the cost incurred by the business during the process of manufacturing of goods and is directly related to the production. It generally includes the cost of raw material, labor and other manufacturing support costs. Gross Profit: The profit made after subtracting or debiting the costs related to the goods sold from the total revenue earned or made through sales in a fiscal year is the gross profit. First in First out: In case of first in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out. Last in First out: In case of last in, first out, also known as LIFO method, the inventory which was bought in the last will be taken out first. Weighted Average Cost method: In this method the weighted average cost is evaluated after any purchases have been made and transactions are recorded as when purchase or sales take place. Specific Identification method: Under this method, there is a continuous tracking of the inventory and the inventory cost at the time of purchase on the basis of unique identity which thus helps in the valuation of the ending inventory as well as the cost of goods sold. This method is used generally when the company is involved in limited expensive goods which are easily identifiable. To compute: 1. Cost of goods available for sale and number of units available for sale. 2. Number of units in ending inventory. 3. Cost of ending inventory under the following methods: (a) FIFO (b) LIFO (c) Weighted average (d) Specific identification 4. Gross profit for each of the four methods in part 5. The inventory costing method suitable incase of bonus earned on gross profit. Given info, Date Particulars Units acquired Cost per unit ($) Units sold Retail price per unit ($) May 1 Beginning inventory 150 300 May 6 Purchase 350 350 May 9 Sales 800 75 May 17 Purchase 80 450 May 25 Purchase 100 458 May 30 Sales 600 75 Total 680 480 The ending inventory has, 70 units are from May 1, 50 units are from May 6 and 80 units are from May 17.

Question

Want to see the full answer?

Answer 1

Question

Chapter 5, Problem 3PSB

To determine

Inventory:

Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

Perpetual Inventory System:

In perpetual inventory system there is a continuous recording of transactions as and when they take place that is purchase and sale transactions are recorded whenever they occur.

Cost of Goods Available for Sale:

It basically includes the cost of inventory which is ready for sale within an accounting period. It mainly includes the cost of beginning inventory as well as the stock purchased in that year and the production within that period (if any).

Cost of Goods Sold:

Cost of goods sold is the total expenses or the cost incurred by the business during the process of manufacturing of goods and is directly related to the production. It generally includes the cost of raw material, labor and other manufacturing support costs.

Gross Profit:

The profit made after subtracting or debiting the costs related to the goods sold from the total revenue earned or made through sales in a fiscal year is the gross profit.

First in First out:

In case of first in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in First out:

In case of last in, first out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Weighted Average Cost method:

In this method the weighted average cost is evaluated after any purchases have been made and transactions are recorded as when purchase or sales take place.

Specific Identification method:

Under this method, there is a continuous tracking of the inventory and the inventory cost at the time of purchase on the basis of unique identity which thus helps in the valuation of the ending inventory as well as the cost of goods sold. This method is used generally when the company is involved in limited expensive goods which are easily identifiable.

To compute: 1. Cost of goods available for sale and number of units available for sale.
2. Number of units in ending inventory.
3. Cost of ending inventory under the following methods:

(a) FIFO
(b) LIFO
(c) Weighted average
(d) Specific identification

4. Gross profit for each of the four methods in part
5. The inventory costing method suitable incase of bonus earned on gross profit.
Given info,

Date Particulars Units acquired Cost per unit ($) Units sold Retail price per unit ($)
May 1 Beginning inventory 150 300
May 6 Purchase 350 350
May 9 Sales 800 75
May 17 Purchase 80 450
May 25 Purchase 100 458
May 30 Sales 600 75
Total 680 480

The ending inventory has,
70 units are from May 1,
50 units are from May 6 and
80 units are from May 17.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Jackson and Ashley Turner (both 45 years old) are married and want to contribute to a Roth IRA for Ashley. For the current year, their AGI is $236,500. Jackson and Ashley each earned half of the income. How much can Ashley contribute to her Roth IRA if they file a joint return?

I am searching for a clear explanation of this financial accounting problem with valid methods.

Jimmer has contributed $17,000 to his Roth IRA, and the balance in the account is $20,000. In the current year, Jimmer withdrew $18,800 from the Roth IRA to pay for a new car. If Jimmer's marginal ordinary income tax rate is 23 percent, what amount of tax and penalty, if any, is Jimmer required to pay on the withdrawal in each of the following alternative situations? Jimmer opened the Roth account 44 months before he withdrew the $18,800, and Jimmer is 62 years of age. What is the tax amount?

Answer 2

Question

Chapter 5, Problem 3PSB

To determine

Inventory:

Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

Perpetual Inventory System:

In perpetual inventory system there is a continuous recording of transactions as and when they take place that is purchase and sale transactions are recorded whenever they occur.

Cost of Goods Available for Sale:

It basically includes the cost of inventory which is ready for sale within an accounting period. It mainly includes the cost of beginning inventory as well as the stock purchased in that year and the production within that period (if any).

Cost of Goods Sold:

Cost of goods sold is the total expenses or the cost incurred by the business during the process of manufacturing of goods and is directly related to the production. It generally includes the cost of raw material, labor and other manufacturing support costs.

Gross Profit:

The profit made after subtracting or debiting the costs related to the goods sold from the total revenue earned or made through sales in a fiscal year is the gross profit.

First in First out:

In case of first in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in First out:

In case of last in, first out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Weighted Average Cost method:

In this method the weighted average cost is evaluated after any purchases have been made and transactions are recorded as when purchase or sales take place.

Specific Identification method:

Under this method, there is a continuous tracking of the inventory and the inventory cost at the time of purchase on the basis of unique identity which thus helps in the valuation of the ending inventory as well as the cost of goods sold. This method is used generally when the company is involved in limited expensive goods which are easily identifiable.

To compute: 1. Cost of goods available for sale and number of units available for sale.
2. Number of units in ending inventory.
3. Cost of ending inventory under the following methods:

(a) FIFO
(b) LIFO
(c) Weighted average
(d) Specific identification

4. Gross profit for each of the four methods in part
5. The inventory costing method suitable incase of bonus earned on gross profit.
Given info,

Date Particulars Units acquired Cost per unit ($) Units sold Retail price per unit ($)
May 1 Beginning inventory 150 300
May 6 Purchase 350 350
May 9 Sales 800 75
May 17 Purchase 80 450
May 25 Purchase 100 458
May 30 Sales 600 75
Total 680 480

The ending inventory has,
70 units are from May 1,
50 units are from May 6 and
80 units are from May 17.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 5, Problem 3PSB

To determine

Inventory:

Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

Perpetual Inventory System:

In perpetual inventory system there is a continuous recording of transactions as and when they take place that is purchase and sale transactions are recorded whenever they occur.

Cost of Goods Available for Sale:

It basically includes the cost of inventory which is ready for sale within an accounting period. It mainly includes the cost of beginning inventory as well as the stock purchased in that year and the production within that period (if any).

Cost of Goods Sold:

Cost of goods sold is the total expenses or the cost incurred by the business during the process of manufacturing of goods and is directly related to the production. It generally includes the cost of raw material, labor and other manufacturing support costs.

Gross Profit:

The profit made after subtracting or debiting the costs related to the goods sold from the total revenue earned or made through sales in a fiscal year is the gross profit.

First in First out:

In case of first in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in First out:

In case of last in, first out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Weighted Average Cost method:

In this method the weighted average cost is evaluated after any purchases have been made and transactions are recorded as when purchase or sales take place.

Specific Identification method:

Under this method, there is a continuous tracking of the inventory and the inventory cost at the time of purchase on the basis of unique identity which thus helps in the valuation of the ending inventory as well as the cost of goods sold. This method is used generally when the company is involved in limited expensive goods which are easily identifiable.

To compute: 1. Cost of goods available for sale and number of units available for sale.
2. Number of units in ending inventory.
3. Cost of ending inventory under the following methods:

(a) FIFO
(b) LIFO
(c) Weighted average
(d) Specific identification

4. Gross profit for each of the four methods in part
5. The inventory costing method suitable incase of bonus earned on gross profit.
Given info,

Date Particulars Units acquired Cost per unit ($) Units sold Retail price per unit ($)
May 1 Beginning inventory 150 300
May 6 Purchase 350 350
May 9 Sales 800 75
May 17 Purchase 80 450
May 25 Purchase 100 458
May 30 Sales 600 75
Total 680 480

The ending inventory has,
70 units are from May 1,
50 units are from May 6 and
80 units are from May 17.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 5, Problem 3PSB

To determine

Inventory:

Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

Perpetual Inventory System:

In perpetual inventory system there is a continuous recording of transactions as and when they take place that is purchase and sale transactions are recorded whenever they occur.

Cost of Goods Available for Sale:

It basically includes the cost of inventory which is ready for sale within an accounting period. It mainly includes the cost of beginning inventory as well as the stock purchased in that year and the production within that period (if any).

Cost of Goods Sold:

Cost of goods sold is the total expenses or the cost incurred by the business during the process of manufacturing of goods and is directly related to the production. It generally includes the cost of raw material, labor and other manufacturing support costs.

Gross Profit:

The profit made after subtracting or debiting the costs related to the goods sold from the total revenue earned or made through sales in a fiscal year is the gross profit.

First in First out:

In case of first in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in First out:

In case of last in, first out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Weighted Average Cost method:

In this method the weighted average cost is evaluated after any purchases have been made and transactions are recorded as when purchase or sales take place.

Specific Identification method:

Under this method, there is a continuous tracking of the inventory and the inventory cost at the time of purchase on the basis of unique identity which thus helps in the valuation of the ending inventory as well as the cost of goods sold. This method is used generally when the company is involved in limited expensive goods which are easily identifiable.

To compute: 1. Cost of goods available for sale and number of units available for sale.
2. Number of units in ending inventory.
3. Cost of ending inventory under the following methods:

(a) FIFO
(b) LIFO
(c) Weighted average
(d) Specific identification

4. Gross profit for each of the four methods in part
5. The inventory costing method suitable incase of bonus earned on gross profit.
Given info,

Date Particulars Units acquired Cost per unit ($) Units sold Retail price per unit ($)
May 1 Beginning inventory 150 300
May 6 Purchase 350 350
May 9 Sales 800 75
May 17 Purchase 80 450
May 25 Purchase 100 458
May 30 Sales 600 75
Total 680 480

The ending inventory has,
70 units are from May 1,
50 units are from May 6 and
80 units are from May 17.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 5, Problem 3PSB

To determine

Inventory:

Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

Perpetual Inventory System:

In perpetual inventory system there is a continuous recording of transactions as and when they take place that is purchase and sale transactions are recorded whenever they occur.

Cost of Goods Available for Sale:

It basically includes the cost of inventory which is ready for sale within an accounting period. It mainly includes the cost of beginning inventory as well as the stock purchased in that year and the production within that period (if any).

Cost of Goods Sold:

Cost of goods sold is the total expenses or the cost incurred by the business during the process of manufacturing of goods and is directly related to the production. It generally includes the cost of raw material, labor and other manufacturing support costs.

Gross Profit:

The profit made after subtracting or debiting the costs related to the goods sold from the total revenue earned or made through sales in a fiscal year is the gross profit.

First in First out:

In case of first in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in First out:

In case of last in, first out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Weighted Average Cost method:

In this method the weighted average cost is evaluated after any purchases have been made and transactions are recorded as when purchase or sales take place.

Specific Identification method:

Under this method, there is a continuous tracking of the inventory and the inventory cost at the time of purchase on the basis of unique identity which thus helps in the valuation of the ending inventory as well as the cost of goods sold. This method is used generally when the company is involved in limited expensive goods which are easily identifiable.

To compute: 1. Cost of goods available for sale and number of units available for sale.
2. Number of units in ending inventory.
3. Cost of ending inventory under the following methods:

(a) FIFO
(b) LIFO
(c) Weighted average
(d) Specific identification

4. Gross profit for each of the four methods in part
5. The inventory costing method suitable incase of bonus earned on gross profit.
Given info,

Date Particulars Units acquired Cost per unit ($) Units sold Retail price per unit ($)
May 1 Beginning inventory 150 300
May 6 Purchase 350 350
May 9 Sales 800 75
May 17 Purchase 80 450
May 25 Purchase 100 458
May 30 Sales 600 75
Total 680 480

The ending inventory has,
70 units are from May 1,
50 units are from May 6 and
80 units are from May 17.

Answer 6

Chapter 5, Problem 3PSB

To determine

Inventory:

Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

Perpetual Inventory System:

In perpetual inventory system there is a continuous recording of transactions as and when they take place that is purchase and sale transactions are recorded whenever they occur.

Cost of Goods Available for Sale:

It basically includes the cost of inventory which is ready for sale within an accounting period. It mainly includes the cost of beginning inventory as well as the stock purchased in that year and the production within that period (if any).

Cost of Goods Sold:

Cost of goods sold is the total expenses or the cost incurred by the business during the process of manufacturing of goods and is directly related to the production. It generally includes the cost of raw material, labor and other manufacturing support costs.

Gross Profit:

The profit made after subtracting or debiting the costs related to the goods sold from the total revenue earned or made through sales in a fiscal year is the gross profit.

First in First out:

In case of first in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in First out:

In case of last in, first out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Weighted Average Cost method:

In this method the weighted average cost is evaluated after any purchases have been made and transactions are recorded as when purchase or sales take place.

Specific Identification method:

Under this method, there is a continuous tracking of the inventory and the inventory cost at the time of purchase on the basis of unique identity which thus helps in the valuation of the ending inventory as well as the cost of goods sold. This method is used generally when the company is involved in limited expensive goods which are easily identifiable.

To compute: 1. Cost of goods available for sale and number of units available for sale.
2. Number of units in ending inventory.
3. Cost of ending inventory under the following methods:

(a) FIFO
(b) LIFO
(c) Weighted average
(d) Specific identification

4. Gross profit for each of the four methods in part
5. The inventory costing method suitable incase of bonus earned on gross profit.
Given info,

Date Particulars Units acquired Cost per unit ($) Units sold Retail price per unit ($)
May 1 Beginning inventory 150 300
May 6 Purchase 350 350
May 9 Sales 800 75
May 17 Purchase 80 450
May 25 Purchase 100 458
May 30 Sales 600 75
Total 680 480

The ending inventory has,
70 units are from May 1,
50 units are from May 6 and
80 units are from May 17.

Answer 7

Chapter 5, Problem 3PSB

To determine

Inventory:

Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

Perpetual Inventory System:

In perpetual inventory system there is a continuous recording of transactions as and when they take place that is purchase and sale transactions are recorded whenever they occur.

Cost of Goods Available for Sale:

It basically includes the cost of inventory which is ready for sale within an accounting period. It mainly includes the cost of beginning inventory as well as the stock purchased in that year and the production within that period (if any).

Cost of Goods Sold:

Cost of goods sold is the total expenses or the cost incurred by the business during the process of manufacturing of goods and is directly related to the production. It generally includes the cost of raw material, labor and other manufacturing support costs.

Gross Profit:

The profit made after subtracting or debiting the costs related to the goods sold from the total revenue earned or made through sales in a fiscal year is the gross profit.

First in First out:

In case of first in, first out method, also known as FIFO method, the inventory which was bought first will also be the first one to be taken out.

Last in First out:

In case of last in, first out, also known as LIFO method, the inventory which was bought in the last will be taken out first.

Weighted Average Cost method:

In this method the weighted average cost is evaluated after any purchases have been made and transactions are recorded as when purchase or sales take place.

Specific Identification method:

Under this method, there is a continuous tracking of the inventory and the inventory cost at the time of purchase on the basis of unique identity which thus helps in the valuation of the ending inventory as well as the cost of goods sold. This method is used generally when the company is involved in limited expensive goods which are easily identifiable.

To compute: 1. Cost of goods available for sale and number of units available for sale.
2. Number of units in ending inventory.
3. Cost of ending inventory under the following methods:

(a) FIFO
(b) LIFO
(c) Weighted average
(d) Specific identification

4. Gross profit for each of the four methods in part
5. The inventory costing method suitable incase of bonus earned on gross profit.
Given info,

Date Particulars Units acquired Cost per unit ($) Units sold Retail price per unit ($)
May 1 Beginning inventory 150 300
May 6 Purchase 350 350
May 9 Sales 800 75
May 17 Purchase 80 450
May 25 Purchase 100 458
May 30 Sales 600 75
Total 680 480

The ending inventory has,
70 units are from May 1,
50 units are from May 6 and
80 units are from May 17.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 5 - Prob. 1QS Ch. 5 - Prob. 2QS Ch. 5 - Prob. 3QS Ch. 5 - Prob. 4QS Ch. 5 - Perpetual: Inventory costing with FIFO P1 A...Ch. 5 - Prob. 6QS Ch. 5 - Prob. 7QS Ch. 5 - Prob. 8QS Ch. 5 - Prob. 9QS Ch. 5 - A Periodic: Inventory costing with weighted...

Concept explainers

Videos

Want to see the full answer?

Chapter 5 Solutions

Date	Particulars	Units acquired	Cost per unit ($)	Units sold	Retail price per unit ($)
May 1	Beginning inventory	150	300
May 6	Purchase	350	350
May 9	Sales			800	75
May 17	Purchase	80	450
May 25	Purchase	100	458
May 30	Sales			600	75
	Total	680		480