Horngren's Financial & Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780133866292
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 6, Problem 6.20E
Comparing cost of goods sold and gross profit-FIFO, LIFO, and weighted-average methods
Assume that RK Tire Store completed the following perpetual inventory transactions for a line of tires:
| May 1 | Beginning merchandise inventory | 24 tires@$ 61 each |
| 11 | Purchase | 6 tires @ $ 76 each |
| 23 | Sale | 16 tires @ $ 89 each |
| 26 | Purchase | 14 tires@$ 86 each |
| 29 | Sale | 17 tires@ $ 89 each |
Requirements
1. Compute cost of goods sold and gross profit using the FIFO inventory costing method.
2. Compute cost of goods sold and gross profit using the LIFO inventory costing method.
3. Compute cost of goods sold and gross profit using the weighted average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.)
4. Which method results in the largest gross profit, and why?
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Students have asked these similar questions
The following are the transactions for the month of July.
Units
July 1
July 13
Beginning Inventory
Purchase
July 25
July 31
Sold
50
250
(100)
Unit
Cost
$ 10
Unit
Selling
Price
13
$ 15
Ending Inventory
200
Required:
a. Calculate cost of goods available for sale and ending inventory under weighted average cost. Assume a periodic inventory system
is used.
b. Calculate sales, cost of goods sold, and gross profit, under weighted average cost. Assume a periodic inventory system is used.
Answer is complete but not entirely correct.
Complete this question by entering your answers in the tabs below.
Required A Required B
Calculate cost of goods available for sale and ending inventory under weighted average cost. Assume a periodic inventory
system is used. (Round "Cost per Unit" to 2 decimal places.)
Weighted Average (Periodic)
Units
Cost
per Unit
Total
Beginning Inventory
50
$ 10.00
$
500
Purchases
250
$ 13.00
$
3,250
Goods Available for Sale
3,750
Cost of Goods Sold
100 S
0.00 X
0
Subject - account
Please help me.
Thankyou.
1.
Compute the ending inventory and the cost of goods sold under the LIFO cost flow assumption assuming both a perpetual and a periodic inventory system. If required, round your answers to the nearest dollar.
Chapter 6 Solutions
Horngren's Financial & Managerial Accounting (5th Edition)
Ch. 6 - Which principle or concept states that businesses...Ch. 6 - Which inventory costing method assigns to ending...Ch. 6 - Assume Nile.com began April with 14 units of...Ch. 6 - Suppose Nile.com used the weighted-average...Ch. 6 - Which inventory costing method results in the...Ch. 6 - Prob. 6QCCh. 6 - At December 31, 2016, Stevenson Company overstated...Ch. 6 - Suppose Maestros had cost of goods sold during the...Ch. 6 - Suppose Nile.com used the LIFO inventory costing...Ch. 6 - Prob. 1RQ
Ch. 6 - Prob. 2RQCh. 6 - Prob. 3RQCh. 6 - What is the goal of conservatism?Ch. 6 - Prob. 5RQCh. 6 - Under a perpetual inventory system, what are the...Ch. 6 - Prob. 7RQCh. 6 - Prob. 8RQCh. 6 - What does the lower-of-cost-or-market (LCM) rule...Ch. 6 - What account is debited when recording the...Ch. 6 - What is the effect on cost of goods sold, gross...Ch. 6 - When does an inventory error cancel out, and why?Ch. 6 - Prob. 13RQCh. 6 - Prob. 14RQCh. 6 - Prob. 15ARQCh. 6 - Prob. 16ARQCh. 6 - Determining inventory accounting principles Ward...Ch. 6 - Determining inventory costing methods Ward Hard...Ch. 6 - Use the following information to answer Short...Ch. 6 - Use the following information to answer Short...Ch. 6 - Use the following information to answer Short...Ch. 6 - Use the following information to answer Short...Ch. 6 - Comparing Cost of Goods Sold under FIFO, UFO, and...Ch. 6 - Applying the lower-of-cost-or-market rule Assume...Ch. 6 - Determining the effect of an inventory error...Ch. 6 - Computing the rate of inventory turnover and days...Ch. 6 - Use the following information to answer Short...Ch. 6 - Prob. 6.12SECh. 6 - Prob. 6.13SECh. 6 - Using accounting vocabulary Match the accounting...Ch. 6 - Comparing inventory methods Zippy, a regional...Ch. 6 - Prob. 6.16ECh. 6 - Use the following information to answer Exercises...Ch. 6 - Use the following information to answer Exercises...Ch. 6 - Comparing amounts for cost of goods sold, ending...Ch. 6 - Comparing cost of goods sold and gross...Ch. 6 - Prob. 6.21ECh. 6 - Prob. 6.22ECh. 6 - Prob. 6.23ECh. 6 - Prob. 6.24ECh. 6 - Prob. 6.25ECh. 6 - Prob. 6.26ECh. 6 - Prob. 6.27ECh. 6 - Accounting for inventory using the perpetual...Ch. 6 - Accounting for inventory using the perpetual...Ch. 6 - Prob. 6.30APCh. 6 - Correcting inventory errors over a three-year...Ch. 6 - Accounting for inventory using the periodic...Ch. 6 - Accounting for inventory using the perpetual...Ch. 6 - Prob. 6.34BPCh. 6 - Prob. 6.35BPCh. 6 - Prob. 6.36BPCh. 6 - Prob. 6.37BPCh. 6 - Prob. 6.38CPCh. 6 - Accounting for inventory using the perpetual...Ch. 6 - Suppose you manage Campbell Appliance. The stores...Ch. 6 - Ever since he was a kid, Carl Montague wanted to...Ch. 6 - The notes are an important part of a companys...
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