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.

Question

Want to see more full solutions like this?

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 3PSB

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

Answer to Problem 3PSB

The total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 units

Explanation of Solution

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

Date	Particular	Unit	Rate ($)	Total Cost ($)
1^s^t May	Opening inventory	150	300	45000
6^t^hMay	Purchases	350	350	122500
17^t^h May	Purchases	80	450	36000
25^t^h May	Purchases	100	458	45800
Total		680		249,300

So, the total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 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 A.

2.

Expert Solution

Answer to Problem 3PSB

The number of units in ending inventory is 200 units.

Explanation of Solution

The number of units in closing inventory is as follows:

Closing Units= Opening Units+ Units purchased - units sold=150+(350+80+100)-(180+300)= 200 units

The number of units in ending inventory is 200 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 A using FIFO,LIFO and weighted average and specific identification.

3.

Expert Solution

Answer to Problem 3PSB

Explanation of Solution

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

Using FIFO method closing inventory of 200 units will consist:

Particular	Units	Per unit ($)	Amount ($)
6^t^h May	20	350	7000
17^t^h May	80	450	36000
25^t^h May	100	458	45800
Total			88,800

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−888000=$160,500.

Thus, cost assigned to ending inventory is $88,800 and cost of goods sold is $160,500 using FIFO method is $88,800.

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

Using LIFO method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	150	300	45000
6^t^h May	50	350	17500
Total			$62,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$62,500=$186,800.

Thus, cost of assigned to ending inventory is $62,500 cost of goods sold $186,800 using LIFO method.

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

=249,00680=$366.62

The total cost 200 units are:

200×$366.62=$73,324

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−73324=$175,976

Thus, cost assigned to ending inventory $ 73324 and cost of goods sold is $175,976 using weighted average method.

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	70	300	21000
6^t^h May	50	350	17500
17^t^h May	80	450	36000
Total			$75,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−75,500=$174,800

Thus, cost assigned to ending inventory is $75,500 and cost of goods sold is $174,800 using specific identification method.

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

4.

Expert Solution

Answer to Problem 3PSB

Gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and specific identification method is $461200.

Explanation of Solution

Gross profit earn by the company:

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$175976	$174800
Total	$475,500	$449200	$460024	$461200

Thus, gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and the specific identification method is $461200.

5.

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

5.

Expert Solution

Answer to Problem 3PSB

The manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.

Explanation of Solution

FIFO method yield $475,500 gross profit which highest among other methods. So, the manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.

Want to see more full solutions like this?

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

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 3PSB

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

Answer to Problem 3PSB

The total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 units

Explanation of Solution

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

Date	Particular	Unit	Rate ($)	Total Cost ($)
1^s^t May	Opening inventory	150	300	45000
6^t^hMay	Purchases	350	350	122500
17^t^h May	Purchases	80	450	36000
25^t^h May	Purchases	100	458	45800
Total		680		249,300

So, the total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 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 A.

2.

Expert Solution

Answer to Problem 3PSB

The number of units in ending inventory is 200 units.

Explanation of Solution

The number of units in closing inventory is as follows:

Closing Units= Opening Units+ Units purchased - units sold=150+(350+80+100)-(180+300)= 200 units

The number of units in ending inventory is 200 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 A using FIFO,LIFO and weighted average and specific identification.

3.

Expert Solution

Answer to Problem 3PSB

Explanation of Solution

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

Using FIFO method closing inventory of 200 units will consist:

Particular	Units	Per unit ($)	Amount ($)
6^t^h May	20	350	7000
17^t^h May	80	450	36000
25^t^h May	100	458	45800
Total			88,800

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−888000=$160,500.

Thus, cost assigned to ending inventory is $88,800 and cost of goods sold is $160,500 using FIFO method is $88,800.

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

Using LIFO method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	150	300	45000
6^t^h May	50	350	17500
Total			$62,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$62,500=$186,800.

Thus, cost of assigned to ending inventory is $62,500 cost of goods sold $186,800 using LIFO method.

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

=249,00680=$366.62

The total cost 200 units are:

200×$366.62=$73,324

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−73324=$175,976

Thus, cost assigned to ending inventory $ 73324 and cost of goods sold is $175,976 using weighted average method.

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	70	300	21000
6^t^h May	50	350	17500
17^t^h May	80	450	36000
Total			$75,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−75,500=$174,800

Thus, cost assigned to ending inventory is $75,500 and cost of goods sold is $174,800 using specific identification method.

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

4.

Expert Solution

Answer to Problem 3PSB

Gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and specific identification method is $461200.

Explanation of Solution

Gross profit earn by the company:

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$175976	$174800
Total	$475,500	$449200	$460024	$461200

Thus, gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and the specific identification method is $461200.

5.

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

5.

Expert Solution

Answer to Problem 3PSB

The manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.

Explanation of Solution

FIFO method yield $475,500 gross profit which highest among other methods. So, the manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.

Want to see more full solutions like this?

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

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 3PSB

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

Answer to Problem 3PSB

The total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 units

Explanation of Solution

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

Date	Particular	Unit	Rate ($)	Total Cost ($)
1^s^t May	Opening inventory	150	300	45000
6^t^hMay	Purchases	350	350	122500
17^t^h May	Purchases	80	450	36000
25^t^h May	Purchases	100	458	45800
Total		680		249,300

So, the total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 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 A.

2.

Expert Solution

Answer to Problem 3PSB

The number of units in ending inventory is 200 units.

Explanation of Solution

The number of units in closing inventory is as follows:

Closing Units= Opening Units+ Units purchased - units sold=150+(350+80+100)-(180+300)= 200 units

The number of units in ending inventory is 200 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 A using FIFO,LIFO and weighted average and specific identification.

3.

Expert Solution

Answer to Problem 3PSB

Explanation of Solution

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

Using FIFO method closing inventory of 200 units will consist:

Particular	Units	Per unit ($)	Amount ($)
6^t^h May	20	350	7000
17^t^h May	80	450	36000
25^t^h May	100	458	45800
Total			88,800

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−888000=$160,500.

Thus, cost assigned to ending inventory is $88,800 and cost of goods sold is $160,500 using FIFO method is $88,800.

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

Using LIFO method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	150	300	45000
6^t^h May	50	350	17500
Total			$62,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$62,500=$186,800.

Thus, cost of assigned to ending inventory is $62,500 cost of goods sold $186,800 using LIFO method.

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

=249,00680=$366.62

The total cost 200 units are:

200×$366.62=$73,324

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−73324=$175,976

Thus, cost assigned to ending inventory $ 73324 and cost of goods sold is $175,976 using weighted average method.

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	70	300	21000
6^t^h May	50	350	17500
17^t^h May	80	450	36000
Total			$75,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−75,500=$174,800

Thus, cost assigned to ending inventory is $75,500 and cost of goods sold is $174,800 using specific identification method.

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

4.

Expert Solution

Answer to Problem 3PSB

Gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and specific identification method is $461200.

Explanation of Solution

Gross profit earn by the company:

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$175976	$174800
Total	$475,500	$449200	$460024	$461200

Thus, gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and the specific identification method is $461200.

5.

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

5.

Expert Solution

Answer to Problem 3PSB

The manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.

Explanation of Solution

FIFO method yield $475,500 gross profit which highest among other methods. So, the manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.

Want to see more full solutions like this?

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

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 3PSB

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

Answer to Problem 3PSB

The total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 units

Explanation of Solution

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

Date	Particular	Unit	Rate ($)	Total Cost ($)
1^s^t May	Opening inventory	150	300	45000
6^t^hMay	Purchases	350	350	122500
17^t^h May	Purchases	80	450	36000
25^t^h May	Purchases	100	458	45800
Total		680		249,300

So, the total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 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 A.

2.

Expert Solution

Answer to Problem 3PSB

The number of units in ending inventory is 200 units.

Explanation of Solution

The number of units in closing inventory is as follows:

Closing Units= Opening Units+ Units purchased - units sold=150+(350+80+100)-(180+300)= 200 units

The number of units in ending inventory is 200 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 A using FIFO,LIFO and weighted average and specific identification.

3.

Expert Solution

Answer to Problem 3PSB

Explanation of Solution

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

Using FIFO method closing inventory of 200 units will consist:

Particular	Units	Per unit ($)	Amount ($)
6^t^h May	20	350	7000
17^t^h May	80	450	36000
25^t^h May	100	458	45800
Total			88,800

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−888000=$160,500.

Thus, cost assigned to ending inventory is $88,800 and cost of goods sold is $160,500 using FIFO method is $88,800.

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

Using LIFO method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	150	300	45000
6^t^h May	50	350	17500
Total			$62,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$62,500=$186,800.

Thus, cost of assigned to ending inventory is $62,500 cost of goods sold $186,800 using LIFO method.

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

=249,00680=$366.62

The total cost 200 units are:

200×$366.62=$73,324

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−73324=$175,976

Thus, cost assigned to ending inventory $ 73324 and cost of goods sold is $175,976 using weighted average method.

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	70	300	21000
6^t^h May	50	350	17500
17^t^h May	80	450	36000
Total			$75,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−75,500=$174,800

Thus, cost assigned to ending inventory is $75,500 and cost of goods sold is $174,800 using specific identification method.

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

4.

Expert Solution

Answer to Problem 3PSB

Gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and specific identification method is $461200.

Explanation of Solution

Gross profit earn by the company:

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$175976	$174800
Total	$475,500	$449200	$460024	$461200

Thus, gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and the specific identification method is $461200.

5.

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

5.

Expert Solution

Answer to Problem 3PSB

The manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.

Explanation of Solution

FIFO method yield $475,500 gross profit which highest among other methods. So, the manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.

Want to see more full solutions like this?

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

Answer 5

Chapter 5, Problem 3PSB

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

Answer to Problem 3PSB

The total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 units

Explanation of Solution

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

Date	Particular	Unit	Rate ($)	Total Cost ($)
1^s^t May	Opening inventory	150	300	45000
6^t^hMay	Purchases	350	350	122500
17^t^h May	Purchases	80	450	36000
25^t^h May	Purchases	100	458	45800
Total		680		249,300

So, the total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 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 A.

2.

Expert Solution

Answer to Problem 3PSB

The number of units in ending inventory is 200 units.

Explanation of Solution

The number of units in closing inventory is as follows:

Closing Units= Opening Units+ Units purchased - units sold=150+(350+80+100)-(180+300)= 200 units

The number of units in ending inventory is 200 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 A using FIFO,LIFO and weighted average and specific identification.

3.

Expert Solution

Answer to Problem 3PSB

Explanation of Solution

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

Using FIFO method closing inventory of 200 units will consist:

Particular	Units	Per unit ($)	Amount ($)
6^t^h May	20	350	7000
17^t^h May	80	450	36000
25^t^h May	100	458	45800
Total			88,800

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−888000=$160,500.

Thus, cost assigned to ending inventory is $88,800 and cost of goods sold is $160,500 using FIFO method is $88,800.

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

Using LIFO method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	150	300	45000
6^t^h May	50	350	17500
Total			$62,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$62,500=$186,800.

Thus, cost of assigned to ending inventory is $62,500 cost of goods sold $186,800 using LIFO method.

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

=249,00680=$366.62

The total cost 200 units are:

200×$366.62=$73,324

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−73324=$175,976

Thus, cost assigned to ending inventory $ 73324 and cost of goods sold is $175,976 using weighted average method.

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	70	300	21000
6^t^h May	50	350	17500
17^t^h May	80	450	36000
Total			$75,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−75,500=$174,800

Thus, cost assigned to ending inventory is $75,500 and cost of goods sold is $174,800 using specific identification method.

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

4.

Expert Solution

Answer to Problem 3PSB

Gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and specific identification method is $461200.

Explanation of Solution

Gross profit earn by the company:

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$175976	$174800
Total	$475,500	$449200	$460024	$461200

Thus, gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and the specific identification method is $461200.

5.

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

5.

Expert Solution

Answer to Problem 3PSB

The manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.

Explanation of Solution

FIFO method yield $475,500 gross profit which highest among other methods. So, the manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.

Answer 6

Chapter 5, Problem 3PSB

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

Answer to Problem 3PSB

The total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 units

Explanation of Solution

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

Date	Particular	Unit	Rate ($)	Total Cost ($)
1^s^t May	Opening inventory	150	300	45000
6^t^hMay	Purchases	350	350	122500
17^t^h May	Purchases	80	450	36000
25^t^h May	Purchases	100	458	45800
Total		680		249,300

So, the total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 units

Answer 7

Chapter 5, Problem 3PSB

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.

Answer 8

1.

Expert Solution

Answer to Problem 3PSB

The total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 units

Answer 9

1.

Expert Solution

Answer 10

1.

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

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

Date	Particular	Unit	Rate ($)	Total Cost ($)
1^s^t May	Opening inventory	150	300	45000
6^t^hMay	Purchases	350	350	122500
17^t^h May	Purchases	80	450	36000
25^t^h May	Purchases	100	458	45800
Total		680		249,300

So, the total cost of goods available for sale is $249300 and the total number of goods available for sale is 680 units

Answer 13

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 A.

2.

Expert Solution

Answer to Problem 3PSB

The number of units in ending inventory is 200 units.

Explanation of Solution

The number of units in closing inventory is as follows:

Closing Units= Opening Units+ Units purchased - units sold=150+(350+80+100)-(180+300)= 200 units

The number of units in ending inventory is 200 units

Answer 14

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 A.

Answer 15

2.

Expert Solution

Answer to Problem 3PSB

The number of units in ending inventory is 200 units.

Answer 16

2.

Expert Solution

Answer 17

2.

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

The number of units in closing inventory is as follows:

Closing Units= Opening Units+ Units purchased - units sold=150+(350+80+100)-(180+300)= 200 units

The number of units in ending inventory is 200 units

Answer 20

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 A using FIFO,LIFO and weighted average and specific identification.

3.

Expert Solution

Answer to Problem 3PSB

Explanation of Solution

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

Using FIFO method closing inventory of 200 units will consist:

Particular	Units	Per unit ($)	Amount ($)
6^t^h May	20	350	7000
17^t^h May	80	450	36000
25^t^h May	100	458	45800
Total			88,800

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−888000=$160,500.

Thus, cost assigned to ending inventory is $88,800 and cost of goods sold is $160,500 using FIFO method is $88,800.

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

Using LIFO method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	150	300	45000
6^t^h May	50	350	17500
Total			$62,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$62,500=$186,800.

Thus, cost of assigned to ending inventory is $62,500 cost of goods sold $186,800 using LIFO method.

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

=249,00680=$366.62

The total cost 200 units are:

200×$366.62=$73,324

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−73324=$175,976

Thus, cost assigned to ending inventory $ 73324 and cost of goods sold is $175,976 using weighted average method.

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	70	300	21000
6^t^h May	50	350	17500
17^t^h May	80	450	36000
Total			$75,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−75,500=$174,800

Thus, cost assigned to ending inventory is $75,500 and cost of goods sold is $174,800 using specific identification method.

Answer 21

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 A using FIFO,LIFO and weighted average and specific identification.

Answer 22

3.

Expert Solution

Answer to Problem 3PSB

Answer 23

3.

Expert Solution

Answer 24

3.

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

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

Using FIFO method closing inventory of 200 units will consist:

Particular	Units	Per unit ($)	Amount ($)
6^t^h May	20	350	7000
17^t^h May	80	450	36000
25^t^h May	100	458	45800
Total			88,800

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−888000=$160,500.

Thus, cost assigned to ending inventory is $88,800 and cost of goods sold is $160,500 using FIFO method is $88,800.

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

Using LIFO method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	150	300	45000
6^t^h May	50	350	17500
Total			$62,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$62,500=$186,800.

Thus, cost of assigned to ending inventory is $62,500 cost of goods sold $186,800 using LIFO method.

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

=249,00680=$366.62

The total cost 200 units are:

200×$366.62=$73,324

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−73324=$175,976

Thus, cost assigned to ending inventory $ 73324 and cost of goods sold is $175,976 using weighted average method.

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory of 200 units will consist

Particular	Units	Per unit ($)	Amount ($)
Opening Inventory	70	300	21000
6^t^h May	50	350	17500
17^t^h May	80	450	36000
Total			$75,500

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−75,500=$174,800

Thus, cost assigned to ending inventory is $75,500 and cost of goods sold is $174,800 using specific identification method.

Answer 27

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

4.

Expert Solution

Answer to Problem 3PSB

Gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and specific identification method is $461200.

Explanation of Solution

Gross profit earn by the company:

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$175976	$174800
Total	$475,500	$449200	$460024	$461200

Thus, gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and the specific identification method is $461200.

Answer 28

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

Answer 29

4.

Expert Solution

Answer to Problem 3PSB

Gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and specific identification method is $461200.

Answer 30

4.

Expert Solution

Answer 31

4.

Expert Solution

Answer 32

Expert Solution

Answer 33

Explanation of Solution

Gross profit earn by the company:

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$175976	$174800
Total	$475,500	$449200	$460024	$461200

Thus, gross using FIFO methods is $636000 , using the LIFO method is $449200, using the weighted average method is $460024, and the specific identification method is $461200.

Answer 34

5.

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

5.

Expert Solution

Answer to Problem 3PSB

The manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.

Explanation of Solution

FIFO method yield $475,500 gross profit which highest among other methods. So, the manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.

Answer 35

5.

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 earned by the company is the cost assigned to ending inventory for company A using FIFO, LIFO and weighted average and specific identification.

Answer 36

5.

Expert Solution

Answer to Problem 3PSB

The manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.

Answer 37

5.

Expert Solution

Answer 38

5.

Expert Solution

Answer 39

Expert Solution

Answer 40

Explanation of Solution

FIFO method yield $475,500 gross profit which highest among other methods. So, the manager will prefer the FIFO method for costing inventory as gross profit is highest in the FIFO method so using this method manager will earn more bonuses.