ACG 2021 Lecture Notes - Lecture 10: Income Statement, Regional Policy Of The European Union, Financial Statement

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chocolateleopard236

25 Feb 2018

School

University of Florida

Department

Accounting

Course

ACG 2021

Professor

Jill Kristen Goslinga

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Document Summary

Cost of goods sold on the income statement. The cost of inventory on hand = inventory. The cost of inventory that"s been sold = cost of goods sold. Sales revenue based on sales price of inventory sold. Cost of goods sold based on cost of inventory sold inventory. Inventory based on cost of inventory on hand. The cost of any asset, like inventory, is the sum of all the costs incurred to bring the asset to its intended use, less any discounts. Cost includes: purchase price, freight in, insurance while in transit, fees or taxes paid to get the inventory ready to sell. Cost of inventory = sum of all costs incurred to bring the inventory to salable condition. Inventory (balance sheet) = # of units of inventory on hand x cost per unit of inventory. In transit goods: depends on shipping terms.

Related Questions

Altira Corporation uses a periodic inventory system. Thefollowing information related to its merchandise inventory duringthe month of August 2018 is available:


Aug.1	Inventory on handâ2,000 units;cost $6.10 each.
8	Purchased 10,000 units for $5.50each.
14	Sold 8,000 units for $12.00each.
18	Purchased 6,000 units for $5.00each.
25	Sold 7,000 units for $11.00each.
31	Inventory on handâ3,000 units

Determine the inventory balance Altira would report in itsAugust 31, 2018, balance sheet and the cost of goods sold it wouldreport in its August 2018 income statement using each of thefollowing cost flow methods.

FIFO

LIFO

Average Cost

Determine the inventory balance Altira would report in itsAugust 31, 2018, balance sheet and the cost of goods sold it wouldreport in its August 2018 income statement using the FIFO method.(Round "Cost per Unit" to 2 decimal places.)

FIFO	Cost of Goods Available for Sale			Cost of Goods Sold - Periodic FIFO			Ending Inventory - Periodic FIFO
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	10,000	$5.50	55,000		$5.50	0
August 18	6,000	$5.00	30,000	3,000	$5.00	15,000		$5.00
Total	18,000		$97,200	15,000		$82,200	0		$0

Determine the inventory balance Altira would report in itsAugust 31, 2018, balance sheet and the cost of goods sold it wouldreport in its August 2018 income statement using LIFO method.(Round "Cost per Unit" to 2 decimal places.)

LIFO	Cost of Goods Available for Sale			Cost of Goods Sold - Periodic LIFO			Ending Inventory - Periodic LIFO
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					$0.00			$0.00
August 18					$0.00			$0.00	0
Total	2,000		$12,200	0		$0	0		$0

Determine the inventory balance Altira would report in itsAugust 31, 2018, balance sheet and the cost of goods sold it wouldreport in its August 2018 income statement using Average costmethod. (Round "Average Cost per Unit" to 2 decimal places.)

AverageCost	Cost ofGoods Available for Sale			Cost ofGoods Sold - Average Cost			EndingInventory - Average Cost
AverageCost	# of units	Unit Cost	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

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22.Altira Corporation uses a perpetual inventory system. Thefollowing transactions affected its merchandise inventory duringthe month of August 2016:


Aug.1	Inventory onhandâ2,000 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 onhandâ3,000 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.)

PerpetualFIFO:	Cost of Goods Available for Sale			Cost of Goods Sold - August 14			Cost of Goods Sold - August 25			Inventory Balance
PerpetualFIFO:	# 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 units in ending inventory	Cost per unit	Ending Inventory
Beg. Inventory	2,000	$6.10	$12,200	2,000	$6.10	$12,200		$6.10	$0		$6.10	$0
Purchases:
August 8	10,000	5.50	55,000		5.50		4,000	5.50	22,000		5.50	0
August 18	6,000	5.00	30,000		5.00	0	3,000	5.00	15,000	3,000	5.00	15,000
Total	18,000		$97,200	2,000		$12,200	7,000		$37,000	3,000		$15,000

PerpetualLIFO:	Cost of Goods Available for Sale			Cost of Goods Sold - August 14			Cost of Goods Sold - August 25			Inventory Balance
PerpetualLIFO:	# 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 units in ending inventory	Cost per unit	Ending Inventory
Beg. Inventory	2,000	$6.10	$12,200		$6.10	$0		$6.10	$0	2,000	$6.10	$12,200
Purchases:
August 8	10,000	5.50	55,000		5.50		1,000	5.50	5,500	1,000	5.50	5,500
August 18	6,000	5.00	30,000		5.00	0	6,000	5.00	30,000		5.00	0
Total	18,000		$97,200	0		$0	7,000		$35,500	3,000		$17,700

Perpetual Average	Inventory on hand			Cost of Goods Sold			Inventory Balance
Perpetual Average	# of units	Cost per unit	Inventory Value	# of units sold	Avg.Cost per unit	Cost of Goods Sold	# of units in ending inventory	Cost per unit	Ending inventory
Beginning Inventory	2,000	$6.10	$12,200				2,000	$6.10	$12,200
Purchase - August 8	10,000	$5.50	55,000
Subtotal Average Cost							12,000	$5.60	$67,200
Sale -August 14				8,000	$5.60	$44,800
Subtotal Average Cost							4,000	$5.60	$22,400
Purchase - August 18	6,000	$5.00	30,000
Subtotal Average Cost							10,000	$5.24	$52,400
Sale - August25				7,000	$5.24	36,680
Total	18,000		$97,200	15,000		$81,480

turquoisecheetah170

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
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
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
AverageCost	# 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 in ending inventory

Perpetual Average	Inventory on hand			Cost of Goods Sold
Perpetual Average	# 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

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ACG 2021 Lecture Notes - Lecture 10: Income Statement, Regional Policy Of The European Union, Financial Statement

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