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: Cost assigned to ending inventory and cost of goods sold using FIFO method.

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 4PSB

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: Cost assigned to ending inventory and cost of goods sold using FIFO method.

1.

Expert Solution

Answer to Problem 4PSB

Cost of goods available for is $249,300 and number of units available for sale is 680

Explanation of Solution

Cost of goods available for sale and number of units available for sale is as follows:

Date	Particular	Units	Per unit cost	Total cost
1^s^t May	Opening inventory	150	300	45000
6^t^h May	Purchase	350	350	122500
17^t^h May	Purchase	80	450	36000
25^t^h May	purchase	100	458	45800
Total		680		249,300

Thus, cost of goods available for is $249,300 and number of units available for sale is 680

Thus the cost assigned to ending inventory under FIFO method is $88800.

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 calculate: Cost assigned to ending inventory and cost of goods sold using FIFO method.

2.

Expert Solution

Answer to Problem 4PSB

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: Cost assigned to ending inventory and cost of goods sold using LIFO method.

3.

Expert Solution

Answer to Problem 4PSB

Cost assigned to ending inventory under FIFO method is $88800, under LIFO method is $62500, using weighted average method is $75600, using specific identification method is $$74,500

Explanation of Solution

Cost assigned under FIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 1

Thus the cost assigned to ending inventory under FIFO method is $88800.

LIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 2

Thus the cost assigned to ending inventory under LIFO method is $62500.

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

Date	Particular	Unit	Cost per unit	Total	Balance inventory
Date	Particular	Unit	Cost per unit	Total	Units	Cost per unit	Total cost
1^s^t May	Opening balance	150	300	45000	150	300	45000
6^t^h may	Purchase	350	350	122500	500	335	167500
9^t^h may	Sales	180	335	60300	320	335	107200
17^t^h may	Purchase	80	450	3600	400	358	143200
25^t^h may	Purchase	100	458	45800	500	378	189000
30^t^h may	Sales	300	378	113400	200	378	75600

Thus, cost assigned to ending inventory using weighted average method is $75600

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory 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			$74,500

Thus, cost assigned to ending inventory using specific identification method is $$74,500

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

Answer to Problem 4PSB

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

Explanation of Solution

Gross profit earn by the company:

Cost of Goods sold:

Cost of goods sold= Cost of goods available for sales- ending inventory

For FIFO method

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−88800=$160500

For LIFO methods

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−62500=$186800

For weighted average method:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$75600=$173700

For specific identification:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−74,500=$174,800

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$173700	$174800
Total	$475,500	$449200	$462300	$461200

Thus, gross using FIFO methods is $636000 , using LIFO method is $449200, using the weighted average method is $460024, and 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 earn by the company is cost assigned to ending inventory for the company A using FIFO,LIFO and weighted average and specific identification.

5.

Expert Solution

Answer to Problem 4PSB

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

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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 4PSB

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: Cost assigned to ending inventory and cost of goods sold using FIFO method.

1.

Expert Solution

Answer to Problem 4PSB

Cost of goods available for is $249,300 and number of units available for sale is 680

Explanation of Solution

Cost of goods available for sale and number of units available for sale is as follows:

Date	Particular	Units	Per unit cost	Total cost
1^s^t May	Opening inventory	150	300	45000
6^t^h May	Purchase	350	350	122500
17^t^h May	Purchase	80	450	36000
25^t^h May	purchase	100	458	45800
Total		680		249,300

Thus, cost of goods available for is $249,300 and number of units available for sale is 680

Thus the cost assigned to ending inventory under FIFO method is $88800.

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 calculate: Cost assigned to ending inventory and cost of goods sold using FIFO method.

2.

Expert Solution

Answer to Problem 4PSB

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: Cost assigned to ending inventory and cost of goods sold using LIFO method.

3.

Expert Solution

Answer to Problem 4PSB

Cost assigned to ending inventory under FIFO method is $88800, under LIFO method is $62500, using weighted average method is $75600, using specific identification method is $$74,500

Explanation of Solution

Cost assigned under FIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 1

Thus the cost assigned to ending inventory under FIFO method is $88800.

LIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 2

Thus the cost assigned to ending inventory under LIFO method is $62500.

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

Date	Particular	Unit	Cost per unit	Total	Balance inventory
Date	Particular	Unit	Cost per unit	Total	Units	Cost per unit	Total cost
1^s^t May	Opening balance	150	300	45000	150	300	45000
6^t^h may	Purchase	350	350	122500	500	335	167500
9^t^h may	Sales	180	335	60300	320	335	107200
17^t^h may	Purchase	80	450	3600	400	358	143200
25^t^h may	Purchase	100	458	45800	500	378	189000
30^t^h may	Sales	300	378	113400	200	378	75600

Thus, cost assigned to ending inventory using weighted average method is $75600

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory 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			$74,500

Thus, cost assigned to ending inventory using specific identification method is $$74,500

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

Answer to Problem 4PSB

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

Explanation of Solution

Gross profit earn by the company:

Cost of Goods sold:

Cost of goods sold= Cost of goods available for sales- ending inventory

For FIFO method

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−88800=$160500

For LIFO methods

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−62500=$186800

For weighted average method:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$75600=$173700

For specific identification:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−74,500=$174,800

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$173700	$174800
Total	$475,500	$449200	$462300	$461200

Thus, gross using FIFO methods is $636000 , using LIFO method is $449200, using the weighted average method is $460024, and 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 earn by the company is cost assigned to ending inventory for the company A using FIFO,LIFO and weighted average and specific identification.

5.

Expert Solution

Answer to Problem 4PSB

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

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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 4PSB

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: Cost assigned to ending inventory and cost of goods sold using FIFO method.

1.

Expert Solution

Answer to Problem 4PSB

Cost of goods available for is $249,300 and number of units available for sale is 680

Explanation of Solution

Cost of goods available for sale and number of units available for sale is as follows:

Date	Particular	Units	Per unit cost	Total cost
1^s^t May	Opening inventory	150	300	45000
6^t^h May	Purchase	350	350	122500
17^t^h May	Purchase	80	450	36000
25^t^h May	purchase	100	458	45800
Total		680		249,300

Thus, cost of goods available for is $249,300 and number of units available for sale is 680

Thus the cost assigned to ending inventory under FIFO method is $88800.

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 calculate: Cost assigned to ending inventory and cost of goods sold using FIFO method.

2.

Expert Solution

Answer to Problem 4PSB

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: Cost assigned to ending inventory and cost of goods sold using LIFO method.

3.

Expert Solution

Answer to Problem 4PSB

Cost assigned to ending inventory under FIFO method is $88800, under LIFO method is $62500, using weighted average method is $75600, using specific identification method is $$74,500

Explanation of Solution

Cost assigned under FIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 1

Thus the cost assigned to ending inventory under FIFO method is $88800.

LIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 2

Thus the cost assigned to ending inventory under LIFO method is $62500.

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

Date	Particular	Unit	Cost per unit	Total	Balance inventory
Date	Particular	Unit	Cost per unit	Total	Units	Cost per unit	Total cost
1^s^t May	Opening balance	150	300	45000	150	300	45000
6^t^h may	Purchase	350	350	122500	500	335	167500
9^t^h may	Sales	180	335	60300	320	335	107200
17^t^h may	Purchase	80	450	3600	400	358	143200
25^t^h may	Purchase	100	458	45800	500	378	189000
30^t^h may	Sales	300	378	113400	200	378	75600

Thus, cost assigned to ending inventory using weighted average method is $75600

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory 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			$74,500

Thus, cost assigned to ending inventory using specific identification method is $$74,500

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

Answer to Problem 4PSB

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

Explanation of Solution

Gross profit earn by the company:

Cost of Goods sold:

Cost of goods sold= Cost of goods available for sales- ending inventory

For FIFO method

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−88800=$160500

For LIFO methods

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−62500=$186800

For weighted average method:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$75600=$173700

For specific identification:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−74,500=$174,800

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$173700	$174800
Total	$475,500	$449200	$462300	$461200

Thus, gross using FIFO methods is $636000 , using LIFO method is $449200, using the weighted average method is $460024, and 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 earn by the company is cost assigned to ending inventory for the company A using FIFO,LIFO and weighted average and specific identification.

5.

Expert Solution

Answer to Problem 4PSB

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

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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 4PSB

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: Cost assigned to ending inventory and cost of goods sold using FIFO method.

1.

Expert Solution

Answer to Problem 4PSB

Cost of goods available for is $249,300 and number of units available for sale is 680

Explanation of Solution

Cost of goods available for sale and number of units available for sale is as follows:

Date	Particular	Units	Per unit cost	Total cost
1^s^t May	Opening inventory	150	300	45000
6^t^h May	Purchase	350	350	122500
17^t^h May	Purchase	80	450	36000
25^t^h May	purchase	100	458	45800
Total		680		249,300

Thus, cost of goods available for is $249,300 and number of units available for sale is 680

Thus the cost assigned to ending inventory under FIFO method is $88800.

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 calculate: Cost assigned to ending inventory and cost of goods sold using FIFO method.

2.

Expert Solution

Answer to Problem 4PSB

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: Cost assigned to ending inventory and cost of goods sold using LIFO method.

3.

Expert Solution

Answer to Problem 4PSB

Cost assigned to ending inventory under FIFO method is $88800, under LIFO method is $62500, using weighted average method is $75600, using specific identification method is $$74,500

Explanation of Solution

Cost assigned under FIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 1

Thus the cost assigned to ending inventory under FIFO method is $88800.

LIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 2

Thus the cost assigned to ending inventory under LIFO method is $62500.

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

Date	Particular	Unit	Cost per unit	Total	Balance inventory
Date	Particular	Unit	Cost per unit	Total	Units	Cost per unit	Total cost
1^s^t May	Opening balance	150	300	45000	150	300	45000
6^t^h may	Purchase	350	350	122500	500	335	167500
9^t^h may	Sales	180	335	60300	320	335	107200
17^t^h may	Purchase	80	450	3600	400	358	143200
25^t^h may	Purchase	100	458	45800	500	378	189000
30^t^h may	Sales	300	378	113400	200	378	75600

Thus, cost assigned to ending inventory using weighted average method is $75600

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory 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			$74,500

Thus, cost assigned to ending inventory using specific identification method is $$74,500

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

Answer to Problem 4PSB

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

Explanation of Solution

Gross profit earn by the company:

Cost of Goods sold:

Cost of goods sold= Cost of goods available for sales- ending inventory

For FIFO method

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−88800=$160500

For LIFO methods

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−62500=$186800

For weighted average method:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$75600=$173700

For specific identification:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−74,500=$174,800

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$173700	$174800
Total	$475,500	$449200	$462300	$461200

Thus, gross using FIFO methods is $636000 , using LIFO method is $449200, using the weighted average method is $460024, and 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 earn by the company is cost assigned to ending inventory for the company A using FIFO,LIFO and weighted average and specific identification.

5.

Expert Solution

Answer to Problem 4PSB

The manager will prefer FIFO method for costing inventory as gross profit is highest in 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 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 4PSB

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: Cost assigned to ending inventory and cost of goods sold using FIFO method.

1.

Expert Solution

Answer to Problem 4PSB

Cost of goods available for is $249,300 and number of units available for sale is 680

Explanation of Solution

Cost of goods available for sale and number of units available for sale is as follows:

Date	Particular	Units	Per unit cost	Total cost
1^s^t May	Opening inventory	150	300	45000
6^t^h May	Purchase	350	350	122500
17^t^h May	Purchase	80	450	36000
25^t^h May	purchase	100	458	45800
Total		680		249,300

Thus, cost of goods available for is $249,300 and number of units available for sale is 680

Thus the cost assigned to ending inventory under FIFO method is $88800.

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 calculate: Cost assigned to ending inventory and cost of goods sold using FIFO method.

2.

Expert Solution

Answer to Problem 4PSB

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: Cost assigned to ending inventory and cost of goods sold using LIFO method.

3.

Expert Solution

Answer to Problem 4PSB

Cost assigned to ending inventory under FIFO method is $88800, under LIFO method is $62500, using weighted average method is $75600, using specific identification method is $$74,500

Explanation of Solution

Cost assigned under FIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 1

Thus the cost assigned to ending inventory under FIFO method is $88800.

LIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 2

Thus the cost assigned to ending inventory under LIFO method is $62500.

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

Date	Particular	Unit	Cost per unit	Total	Balance inventory
Date	Particular	Unit	Cost per unit	Total	Units	Cost per unit	Total cost
1^s^t May	Opening balance	150	300	45000	150	300	45000
6^t^h may	Purchase	350	350	122500	500	335	167500
9^t^h may	Sales	180	335	60300	320	335	107200
17^t^h may	Purchase	80	450	3600	400	358	143200
25^t^h may	Purchase	100	458	45800	500	378	189000
30^t^h may	Sales	300	378	113400	200	378	75600

Thus, cost assigned to ending inventory using weighted average method is $75600

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory 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			$74,500

Thus, cost assigned to ending inventory using specific identification method is $$74,500

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

Answer to Problem 4PSB

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

Explanation of Solution

Gross profit earn by the company:

Cost of Goods sold:

Cost of goods sold= Cost of goods available for sales- ending inventory

For FIFO method

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−88800=$160500

For LIFO methods

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−62500=$186800

For weighted average method:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$75600=$173700

For specific identification:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−74,500=$174,800

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$173700	$174800
Total	$475,500	$449200	$462300	$461200

Thus, gross using FIFO methods is $636000 , using LIFO method is $449200, using the weighted average method is $460024, and 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 earn by the company is cost assigned to ending inventory for the company A using FIFO,LIFO and weighted average and specific identification.

5.

Expert Solution

Answer to Problem 4PSB

The manager will prefer FIFO method for costing inventory as gross profit is highest in 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 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 4PSB

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: Cost assigned to ending inventory and cost of goods sold using FIFO method.

1.

Expert Solution

Answer to Problem 4PSB

Cost of goods available for is $249,300 and number of units available for sale is 680

Explanation of Solution

Cost of goods available for sale and number of units available for sale is as follows:

Date	Particular	Units	Per unit cost	Total cost
1^s^t May	Opening inventory	150	300	45000
6^t^h May	Purchase	350	350	122500
17^t^h May	Purchase	80	450	36000
25^t^h May	purchase	100	458	45800
Total		680		249,300

Thus, cost of goods available for is $249,300 and number of units available for sale is 680

Thus the cost assigned to ending inventory under FIFO method is $88800.

Answer 7

Chapter 5, Problem 4PSB

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: Cost assigned to ending inventory and cost of goods sold using FIFO method.

Answer 8

1.

Expert Solution

Answer to Problem 4PSB

Cost of goods available for is $249,300 and number of units available for sale is 680

Answer 9

1.

Expert Solution

Answer 10

1.

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Cost of goods available for sale and number of units available for sale is as follows:

Date	Particular	Units	Per unit cost	Total cost
1^s^t May	Opening inventory	150	300	45000
6^t^h May	Purchase	350	350	122500
17^t^h May	Purchase	80	450	36000
25^t^h May	purchase	100	458	45800
Total		680		249,300

Thus, cost of goods available for is $249,300 and number of units available for sale is 680

Thus the cost assigned to ending inventory under FIFO method is $88800.

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 calculate: Cost assigned to ending inventory and cost of goods sold using FIFO method.

2.

Expert Solution

Answer to Problem 4PSB

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 calculate: Cost assigned to ending inventory and cost of goods sold using FIFO method.

Answer 15

2.

Expert Solution

Answer to Problem 4PSB

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: Cost assigned to ending inventory and cost of goods sold using LIFO method.

3.

Expert Solution

Answer to Problem 4PSB

Cost assigned to ending inventory under FIFO method is $88800, under LIFO method is $62500, using weighted average method is $75600, using specific identification method is $$74,500

Explanation of Solution

Cost assigned under FIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 1

Thus the cost assigned to ending inventory under FIFO method is $88800.

LIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 2

Thus the cost assigned to ending inventory under LIFO method is $62500.

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

Date	Particular	Unit	Cost per unit	Total	Balance inventory
Date	Particular	Unit	Cost per unit	Total	Units	Cost per unit	Total cost
1^s^t May	Opening balance	150	300	45000	150	300	45000
6^t^h may	Purchase	350	350	122500	500	335	167500
9^t^h may	Sales	180	335	60300	320	335	107200
17^t^h may	Purchase	80	450	3600	400	358	143200
25^t^h may	Purchase	100	458	45800	500	378	189000
30^t^h may	Sales	300	378	113400	200	378	75600

Thus, cost assigned to ending inventory using weighted average method is $75600

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory 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			$74,500

Thus, cost assigned to ending inventory using specific identification method is $$74,500

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: Cost assigned to ending inventory and cost of goods sold using LIFO method.

Answer 22

3.

Expert Solution

Answer to Problem 4PSB

Cost assigned to ending inventory under FIFO method is $88800, under LIFO method is $62500, using weighted average method is $75600, using specific identification method is $$74,500

Answer 23

3.

Expert Solution

Answer 24

3.

Expert Solution

Answer 25

Expert Solution

Answer 26

Explanation of Solution

Cost assigned under FIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 1

Thus the cost assigned to ending inventory under FIFO method is $88800.

LIFO method:

Loose Leaf for Financial Accounting: Information for Decisions, Chapter 5, Problem 4PSB , additional homework tip 2

Thus the cost assigned to ending inventory under LIFO method is $62500.

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

Date	Particular	Unit	Cost per unit	Total	Balance inventory
Date	Particular	Unit	Cost per unit	Total	Units	Cost per unit	Total cost
1^s^t May	Opening balance	150	300	45000	150	300	45000
6^t^h may	Purchase	350	350	122500	500	335	167500
9^t^h may	Sales	180	335	60300	320	335	107200
17^t^h may	Purchase	80	450	3600	400	358	143200
25^t^h may	Purchase	100	458	45800	500	378	189000
30^t^h may	Sales	300	378	113400	200	378	75600

Thus, cost assigned to ending inventory using weighted average method is $75600

Cost assigned to total inventory using specific identification method:

Using specific identification method closing inventory 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			$74,500

Thus, cost assigned to ending inventory using specific identification method is $$74,500

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 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

Answer to Problem 4PSB

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

Explanation of Solution

Gross profit earn by the company:

Cost of Goods sold:

Cost of goods sold= Cost of goods available for sales- ending inventory

For FIFO method

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−88800=$160500

For LIFO methods

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−62500=$186800

For weighted average method:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$75600=$173700

For specific identification:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−74,500=$174,800

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$173700	$174800
Total	$475,500	$449200	$462300	$461200

Thus, gross using FIFO methods is $636000 , using LIFO method is $449200, using the weighted average method is $460024, and 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 earn by the company is cost assigned to ending inventory for the company A using FIFO,LIFO and weighted average and specific identification.

Answer 29

4.

Expert Solution

Answer to Problem 4PSB

Gross using FIFO methods is $636000 , using LIFO method is $449200, using 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:

Cost of Goods sold:

Cost of goods sold= Cost of goods available for sales- ending inventory

For FIFO method

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−88800=$160500

For LIFO methods

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−62500=$186800

For weighted average method:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−$75600=$173700

For specific identification:

Cost of goods sold= Cost of goods available for sales- ending inventory= 249,300−74,500=$174,800

Particular	FIFO method	LIFO method	Weighted average method	Specific identification method
Total Sales	$636000	$636000	$636000	$636000
Cost of goods sold	$160500	$186800	$173700	$174800
Total	$475,500	$449200	$462300	$461200

Thus, gross using FIFO methods is $636000 , using LIFO method is $449200, using the weighted average method is $460024, and 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 earn by the company is cost assigned to ending inventory for the company A using FIFO,LIFO and weighted average and specific identification.

5.

Expert Solution

Answer to Problem 4PSB

The manager will prefer FIFO method for costing inventory as gross profit is highest in 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 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 earn by the company is cost assigned to ending inventory for the company A using FIFO,LIFO and weighted average and specific identification.

Answer 36

5.

Expert Solution

Answer to Problem 4PSB

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