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AC 211 Lecture Notes - Lecture 4: International Financial Reporting Standards, Asset, Sales Tax

50 views4 pages
goldmarten258
15 Nov 2016
School
Quinnipiac University
Department
Accounting
Course
AC 211
Professor
ammons

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Document Summary

Cost of goods sold = cost of goods available for sale minus ending inventory x. Cost of goods available for sale = beginning inventory plus net purchases. Periodic inventory system first, costs will be assigned to units at the end of the period that have not yet been sold; second, cost of goods sold is calculated. Beginning inventory + purchases = cost of goods available for sale = Beginning inventory equals ending inventory for prior year. Perpetual system updates cost of goods sold and inventory accounts with each purchase and each sale. Periodic system records cost of goods sold at a different time. Weighted average applies the same cost per unit in assigning cost to both ending inventory and cost of goods sold. Specific identification expenses the actual cost of the unique inventory items that were sold during the period. Having more cash to run and grow your business is more important than reported earnings lifo.

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Related Questions

10.

Ferris Company began 2016 with 6,000 units of its principalproduct. The cost of each unit is $6. Merchandise transactions forthe month of January 2016 are as follows:

Purchases
Date ofPurchase Units Unit Cost* Total Cost
Jan. 10 5,000 $ 7 $ 35,000
Jan. 18 6,000 8 48,000
Totals 11,000 $ 83,000
*Includes purchase price andcost of freight.
Sales
Date of Sale Units
Jan. 5 3,000
Jan. 12 2,000
Jan. 20 4,000
Total 9,000
8,000 units were on hand at theend of the month.
Required:

Calculate January's ending inventory and cost of goods sold forthe month using each of the following alternatives:

FIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Ending Inventory - Periodic FIFO
# of units Cost per unit Cost of Goods Available for Sale # of units sold Cost perunit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory
BeginningInventory 6,000 $6.00 $36,000 6,000 $6.00 $36,000 $6.00 $0
Purchases:
January 10 5,000 $7.00 35,000 $7.00 0 $7.00 0
January 18 6,000 $8.00 48,000 $8.00 0 $8.00 0
Total 17,000 $119,000 6,000 $36,000 $0
LIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO Ending Inventory - Periodic LIFO
# ofunits Cost perunit Cost ofGoods Available for Sale # of unitssold Cost perunit Cost ofGoods Sold # of unitsin ending inventory Cost perunit EndingInventory
Beginning Inventory
Purchases:
January 10
January 18
Total
AverageCost Cost ofGoods Available for Sale Cost ofGoods Sold - Average Cost EndingInventory - Average Cost
# of units Average Cost per unit Cost of Goods Available for Sale # of units sold Average Cost per Unit Cost of Goods Sold # of units in ending inventory Average Cost per unit Ending Inventory
Beginning Inventory 6,000 $36,000
Purchases:
January 10 5,000 35,000
January 18 6,000 48,000
Total 17,000 $119,000
PerpetualLIFO: Cost of Goods Available for Sale Cost of Goods Sold - January 5 Cost of Goods Sold - January 12 Cost ofGoods Sold - January 20 Inventory Balance
# of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units sold Cost per unit Cost of Goods Sold # of unitssold Cost perunit Cost ofGoods Sold # of units in ending inventory Cost per unit Ending Inventory
Beg. Inventory
Purchases:
January 10
January 18
Total
Perpetual Average Inventory on hand Cost of Goods Sold
# of units Cost per unit Inventory Value # of units sold Avg.Cost per unit Cost of Goods Sold
Beginning Inventory
Sale - January5
Subtotal Average Cost
Purchase - January 10
Subtotal Average Cost
Sale - January12
Subtotal Average Cost
Purchase - January18
SubtotalAverage Cost
Sale - January 20
Total

21. Altira Corporation uses a periodic inventory system. Thefollowing information related to its merchandise inventory duringthe month of August 2016 is available:

Aug.1 Inventory onhand—2,000 units; cost $6.10 each.
8 Purchased 10,000units for $5.50 each.
14 Sold 8,000 units for$12.00 each.
18 Purchased 6,000units for $5.00 each.
25 Sold 7,000 units for$11.00 each.
31 Inventory onhand—3,000 units.
Required:

Determine the inventory balance Altira would report in itsAugust 31, 2016, balance sheet and the cost of goods sold it wouldreport in its August 2016 income statement using each of thefollowing cost flow methods: (Round "Average Cost per Unit"to 2 decimal places.)

FIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Ending Inventory - Periodic FIFO
# of units Cost per unit Cost of Goods Available for Sale # of units sold Cost perunit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory
BeginningInventory 2,000 $6.10 $12,200 2,000 $6.10 $12,200 $6.10 $0
Purchases:
August 8 10,000 $5.50 55,000 $5.50 $5.50 0
August 18 6,000 $5.00 30,000 3,000 $5.00 15,000 $5.00
Total 18,000 $97,200 5,000 $27,200 0 $0
AverageCost Cost ofGoods Available for Sale Cost ofGoods Sold - Average Cost EndingInventory - Average Cost
# of units Average Cost per unit Cost of Goods Available for Sale # of units sold Average Cost per Unit Cost of Goods Sold # of units in ending inventory Average Cost per unit Ending Inventory
Beginning Inventory
Purchases:
August 8
August 18
Total 0 $0 $0 $0
LIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO Ending Inventory - Periodic LIFO
# ofunits Cost perunit Cost ofGoods Available for Sale # of unitssold Cost perunit Cost ofGoods Sold # of unitsin ending inventory Cost perunit EndingInventory
Beginning Inventory 2,000 $6.10 $12,200 $6.10 $0 $6.10
Purchases:
August 8 10,000 $5.50 55,000 $5.50 $5.50
August 18 6,000 $5.00 30,000 $5.00 $5.00 0
Total 18,000 $97,200 0 $0 0 $0

Alta Ski Company's inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system.

Beginning inventory, January 1, 2018 1,250 units @ $90 each
Purchases:
January 15 2,600 units @ $105 each
January 21 2,400 units @ $110 each
Sales:
January 5 1,200 units @ $130 each
January 22 1,600 units @ $140 each
January 29 1,050 units @ $145 each
Ending inventory, January 31, 2018 2,400 units


Compute cost of goods sold for January and the ending inventory using both the FIFO and LIFO methods.

Please fill in the answer in all the spaces I put an "A" in. Will give good feedback, thanks!
FIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Ending Inventory - Periodic FIFO
# of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory
Beginning Inventory A A $0 A $0 $0 A $0 $0
Purchases:
January 15 A A 0 A $0 0 A $0 0
January 21 A A 0 A $0 0 A $0 0
Total 0 $0 0 $0 0 $0
LIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO Ending Inventory - Periodic LIFO
# of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory
Beginning Inventory A A $0 A $0 $0 A $0 $0
Purchases:
January 15 A A 0 A $0 0 A $0 0
January 21 A A 0 A $0 0 A $0 0
Total 0 $0 0 $0 0 $0