Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 6, Problem 6.71BP
1.
To determine
The cost of goods sold and ending inventory amounts for March under the average cost, FIFO, and LIFO costing methods.
2.
To determine
To explain: The reason why cost of goods sold is highest under LIFO.
3.
To determine
To prepare: The Company SS’s income statement for March.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Air Force Surplus began July 2018 with 100 stoves that cost $10 each. During the month, the company made the following purchases at cost:
(Click the icon to view the purchases.)
The company sold 300 stoves, and at July 31, the ending inventory consisted of 70 stoves. The sales price of each stove was $48.
Read the requirements.
Requirement 1. Determine the cost of goods sold and ending inventory amounts for July under the average-cost, FIFO, and LIFO costing methods. Round the average cost per unit to
two decimal places, and round all other amounts to the nearest dollar.
Number of units
Average cost
Cost of goods sold
Ending inventory
Requirements
1. Determine the cost of goods sold and ending inventory amounts for July under
the average-cost, FIFO, and LIFO costing methods. Round the average cost
per unit to two decimal places, and round all other amounts to the nearest
dollar.
2. Explain why cost of goods sold is highest under LIFO. Be specific.
3. Prepare the Air Force Surplus…
(Learning Objective 2: Compare inventory by three methods) Navy Surplus beganJuly 2018 with 80 stoves that cost $10 each. During the month, the company made the following purchases at cost:1826July 6 90 stoves @ $20100 stoves @ $2530 stoves @ $30= $1,800= 2,500= 900The company sold 250 stoves, and at July 31, the ending inventory consisted of 50 stoves. Thesales price of each stove was $52.Requirements1. Determine the cost of goods sold and ending inventory amounts for July under the averagecost, FIFO, and LIFO costing methods. Round the average cost per unit to two decimalplaces, and round all other amounts to the nearest dollar.2. Explain why cost of goods sold is highest under LIFO. Be specific.3. Prepare the Navy Surplus income statement for July. Report gross profit. Operating expensestotaled $3,250. The company uses average costing for inventory. The income tax rate is 40%.
Marvin Company has a beginning inventory of 12 sets of paints at a cost of $1.50 each. During the year, the store purchased 4 sets at $1.60, 6 sets at $2.20, 6 sets at $2.50, and 10 sets at $3.00. By the end of the year, 25 sets were sold.a. Calculate the number of paint sets in ending inventory.
Number of paint sets
b. Calculate the cost of ending inventory under LIFO, FIFO, and the weighted average methods. (Round your answers to the nearest cent.)
Cost of ending inventory under LIFO
Cost of ending inventory under FIFO
Cost of ending inventory under Weighted Average
Chapter 6 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 6 - Ravenna Candles recently purchased candleholders...Ch. 6 - Which inventory system maintains a running record...Ch. 6 - How is cost of goods sold classified in the...Ch. 6 - Snyders total cost of goods available for sale...Ch. 6 - Snyders cost of goods sold using the average-cost...Ch. 6 - Snyders ending inventory using the FIFO method...Ch. 6 - Snyders cost of goods sold using the LIFO method...Ch. 6 - Which U.S. GAAP principle or rule would apply if...Ch. 6 - Corrigan Corporation had beginning inventory of...Ch. 6 - Corrigans gross profit for the period is a.79,000....
Ch. 6 - What is Corrigans gross profit percentage (rounded...Ch. 6 - Prob. 12QCCh. 6 - A companys beginning inventory is 150,000, its net...Ch. 6 - An understatement of ending inventory by 2 million...Ch. 6 - Prob. 6.1ECCh. 6 - LO 1 (Learning Objective 1: Show how to account...Ch. 6 - LO 1 (Learning Objective 1: Show how to account...Ch. 6 - LO 1 (Learning Objective 1: Show how to account...Ch. 6 - (Learning Objective 2: Apply the average-cost,...Ch. 6 - (Learning Objective 2: Compare income tax effects...Ch. 6 - LO 2 (Learning Objective 2: Apply the average-cost...Ch. 6 - (Learning Objective 2: Apply the FIFO method)...Ch. 6 - (Learning Objective 2: Apply the LIFO method)...Ch. 6 - (Learning Objective 2: Compare income, tax, and...Ch. 6 - LO 3 (Learning Objective 3: Apply the...Ch. 6 - (Learning Objective 4: Compute ratio data to...Ch. 6 - (Learning Objective 5: Estimate ending inventory...Ch. 6 - (Learning Objective 6: Analyze the effect of an...Ch. 6 - Prob. 6.14SCh. 6 - LO 1,2 (Learning Objectives 1, 2: Show how to...Ch. 6 - LO 1,2 (Learning Objectives 1, 2: Show how to...Ch. 6 - LO 2 (Learning Objective 2: Compare ending...Ch. 6 - (Learning Objective 2: Compare the tax advantage...Ch. 6 - Prob. 6.19AECh. 6 - LO 2 (Learning Objective 2: Compare ending...Ch. 6 - LO 2 (Learning Objective 2: Compare gross...Ch. 6 - Prob. 6.22AECh. 6 - LO 5 (Learning Objective 5: Compute cost of goods...Ch. 6 - Prob. 6.24AECh. 6 - LO 4 (Learning Objective 4: Compute and evaluate...Ch. 6 - LO 5 (Learning Objective 5: Use the COGS model to...Ch. 6 - LO 5 (Learning Objective 5: Use the COGS model to...Ch. 6 - LO 6 (Learning Objective 6: Analyze the effect of...Ch. 6 - LO 1, 2 (Learning Objectives 1, 2: Show how to...Ch. 6 - LO 1, 2 (Learning Objectives 1, 2: Show how to...Ch. 6 - LO1, 2 (Learning Objectives 1, 2: Show how to...Ch. 6 - Prob. 6.32BECh. 6 - LO 2 (Learning Objective 2: Apply the average,...Ch. 6 - Prob. 6.34BECh. 6 - Prob. 6.35BECh. 6 - Prob. 6.36BECh. 6 - Prob. 6.37BECh. 6 - Prob. 6.38BECh. 6 - Prob. 6.39BECh. 6 - Prob. 6.40BECh. 6 - Prob. 6.41BECh. 6 - Prob. 6.42BECh. 6 - Prob. 6.43QCh. 6 - Prob. 6.44QCh. 6 - Prob. 6.45QCh. 6 - The word market as used in the lower of cost or...Ch. 6 - Prob. 6.47QCh. 6 - Prob. 6.48QCh. 6 - Prob. 6.49QCh. 6 - In a period of rising prices, a.cost of goods sold...Ch. 6 - Prob. 6.51QCh. 6 - The following data come from the inventory records...Ch. 6 - Prob. 6.53QCh. 6 - Prob. 6.54QCh. 6 - Prob. 6.55QCh. 6 - Prob. 6.56QCh. 6 - Prob. 6.57QCh. 6 - Prob. 6.58QCh. 6 - Prob. 6.59QCh. 6 - LO 1, 2 (Learning Objectives 1, 2: Show how to...Ch. 6 - Prob. 6.61APCh. 6 - LO 2 (Learning Objective 2: Compare inventory by...Ch. 6 - LO 2 (Learning Objective 2: Compare various...Ch. 6 - Prob. 6.64APCh. 6 - (Learning Objective 4: Compute and evaluate gross...Ch. 6 - LO 4, 5 (Learning Objectives 4, 5: Compute gross...Ch. 6 - Prob. 6.67APCh. 6 - Prob. 6.68APCh. 6 - Prob. 6.69BPCh. 6 - LO 2 (Learning Objective 2: Apply various...Ch. 6 - Prob. 6.71BPCh. 6 - LO 2 (Learning Objective 2: Compare various...Ch. 6 - LO 3 (Learning Objective 3: Explain GAAP and apply...Ch. 6 - Prob. 6.74BPCh. 6 - Prob. 6.75BPCh. 6 - LO 5 (Learning Objective 5: Use the COGS model to...Ch. 6 - Prob. 6.77BPCh. 6 - Prob. 6.78CEPCh. 6 - Prob. 6.79CEPCh. 6 - Prob. 6.80CEPCh. 6 - Prob. 6.81CEPCh. 6 - Prob. 6.82SCCh. 6 - Prob. 6.83DCCh. 6 - Prob. 6.85EICCh. 6 - Prob. 1FFCh. 6 - Prob. 1FA
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Complete the following (assume $90,000 of overhead to be distributed): (Rou Square Feet Amount of Overhead Allocated Ratio Department A 10,000 Department B 30,000arrow_forwardMarvin Company has a beginning inventory of 12 sets of paints at a cost of $2.00 each. During the year, the store purchased 4 sets at $2.10, 6 sets at $2.70, 6 sets at $3.00, and 10 sets at $3.50. By the end of the year, 25 sets were sold. a. Calculate the number of paint sets in ending inventory. Number of paint sets b. Calculate the cost of ending inventory under LIFO, FIFO, and the weighted average methods. Note: Round your answers to the nearest cent. Cost of ending inventory under LIFO Cost of ending inventory under FIFO Cost of ending inventory under Weighted Averagearrow_forwardAt May 1, 2016, Bibby Company had beginning inventory consisting of 200 units with a unit cost of $9. During May, the company purchased inventory as follows: 800 units at $9 600 units at $10 The company sold 1,000 units during the month for $12 per unit. Bibby uses the average cost method. The Gross profit for May is Select one: O a. $5,625. O b. $6,000. C. $2,625. d. $3,000.arrow_forward
- Seals-Navy Surplus Ltd. began October 2017 with 72 tents that cost $22 each. During the month, Seals-Navy Surplus made the following purchases at cost: (Click the icon to view the purchases.) Seals-Navy Surplus sold 319 tents (149 tents on October 22 and 170 tents on October 30), and at October 31 the ending inventory consists of 48 tents. The sale price of each tent was $53. Requirements dollar. (Assume a perpetual inventory control system is used.) Weighted- Average Cost FIFO Ending inventory Cost of goods sold Requirement 2. Explain why cost of goods sold is highest under weighted-average cost. Be specific. (Assume a perpetual inventory control system is used.) Weighted-average cost results in the highest cost of goods sold because (a) the cost of tents is V and (b) weighted-average cost includes the cost of the When costs are rising, these latest inventory costs are the highest and that makes cost of goods sold the under weighted-average cost. Requirement 3. Prepare Seals-Navy…arrow_forwardBeginning inventory has 100 units. Each unit cost $8. ABC Company bought 400 units at $10 each during the year. They sold 450 units for $20 each. What is cost of goods available for sale? Group of answer choices $500 $4800 $13,800 $9000arrow_forwardam. 127.arrow_forward
- Marvin Company has a beginning inventory of 13 sets of paints at a cost of $1.90 each. During the year, the store purchased 5 sets at $2.00, 7 sets at $2.60, 7 sets at $2.90, and 11 sets at $3.40. By the end of the year, 28 sets were sold. Calculate the number of paint sets in ending inventory. Number of paint sets = 15 Calculate the cost of ending inventory under LIFO, FIFO, and the weighted average methods. Note: Round your answers to the nearest cent. ost of ending inventory under LIFO $28.70selected answer correct Cost of ending inventory under FIFO $49.00selected answer correct Cost of ending inventory under Weighted Average $ Please answer weighted average question.arrow_forwardFirst semester 2020 Q1: ABC company had the following purchases and sales information: Purchases Sales 10 units at $110 January February 20 units at $115 May 11 units November 10 units at $150 Using the FIFO inventory costing method, what is the cost of the ending inventory on 30 November? A. $3,400 B. $3,685 C. 2,185 D. $1,215arrow_forwardOn September 1, Blue Spruce Inc. had an inventory of 20 backpacks at a cost of $30 each. The company uses a perpetual inventory system and estimates returns at 10%. During September, the following transactions occurred: Sep 4 Purchased 37 backpacks at $30 each from Back Packs Unlimited, terms n/30. 6 Received credit of $210 for the return of 7 backpacks purchased on Sept. 4 that were defective. 9 Sold 22 backpacks for $50 each to University Supply, terms n/30. 14 Paid Back Packs Unlimited in full. 18 Received payment from University Supply. Record the September transactions for Blue Spruce Inc..(If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Account Titles and Explanation Date Debit Creditarrow_forward
- Armed Forces Surplus began March 2021 with 100 stoves that cost $10 each. During the month, the company made the following purchases at cost: (Click the icon to view the purchases.) The company sold 312 stoves, and at March 31, the ending inventory consisted of 68 stoves. The sales price of each stove was $45. Read the requirements. Requirement 1. Determine the cost of goods sold and ending inventory amounts for October under the average-cost, FIFO, and LIFO costing methods. Round the average cost per unit to two decimal places, and round all other amounts to the nearest dollar. Average cost Cost of goods sold Ending inventory Number of units $ $ Requirements FIFO Requirement 2. Explain why cost of goods sold is highest under LIFO. Be specific. Under LIFO the cost of goods sold is the highest because costs are rising and LIFO assigns the most recent units purchased to cost of goods sold. 1. Determine the cost of goods sold and ending inventory amounts for March under the average-cost,…arrow_forwardplease help mearrow_forwardNovak Outdoor Stores Inc. uses a perpetual inventory system and has a beginning inventory, as at April 1, of 149 tents. This consists of 51 tents purchased in February at a cost of $213 each and 98 tents purchased in March at a cost of $221 each. During April, the company had the following purchases and sales of tents: Date Apr. 3 (a) 10 17 24 30 (b) Your Answer Units Unit Cost Purchases 204 290 Cost of goods sold Gross profit Ending inventory $ $ Correct Answer (Used) Your answer is incorrect. Gross profit margin Save for Later $276 Determine the cost of goods sold and the cost of the ending inventory using FIFO. 287 19 $ eTextbook and Media Units 78 244 202 Sales Unit Price $393 Calculate Novak Outdoors's gross profit and gross profit margin for the month of April. (Round gross profit margin to 1 decimal place, e.g. 1.2% and gross profit to O decimal places, e.g. 5,275.) 137,902 393 34,153 393 96 Attempts: 2 of 3 used Submit Answerarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
INVENTORY & COST OF GOODS SOLD; Author: Accounting Stuff;https://www.youtube.com/watch?v=OB6RDzqvNbk;License: Standard Youtube License