Public Administration - Municipal ACC106 Chapter Notes - Chapter 5.1: Perpetual Inventory, Gross Margin, Gross Profit

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greenmuskrat329

25 Dec 2016

School

Seneca College

Department

Public Administration - Municipal

Course

Public Administration - Municipal ACC106

Professor

Riggs

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Document Summary

Acc106 1 chapter 5 merchandising operations and the. Inventory: includes all goods of the company owns and expected to sell to customers. Income statement: sales revenue, costs of goods sold, expense, gross margins. Net sales = sales revenue sales/returns/discounts. Costs of goods sold (cogs)/cost of sales. Net sales cost of goods sold (cogs) = gross margin (gross profit) Inventory costs: all cost to bring item to point of sale. Periodic inventory system: once a year, usually inexpensive items, example. Perpetual inventory system: daily, costs of goods sold cogs daily, example. Perpetual inventory system: computerized perpetual inventory system. Quantity of inventory on hand: up to the minute records, current inventory numbers (bar codes) Quantity discounts/purchase discounts: greater quantity = lower price. 2: n/30, 2% paid in 15 days or net by 30 days = eom end of month. Purchase returns and allowances: return defective merchandise or keep at a discount.

Related Questions


	Periodic Inventory Method

	Better Bottles, Inc. uses a PERIODIC inventory system and has the following information available:

	Description	# of Units	Cost per Unit	Total Cost
	Beginning inventory	20	$20.00	$400
	Jan 5 sold	15
	Jan 15 purchase	27	$22.00	594
	Jan 18 sold	21
	Jan 20 purchase	33	$30.00	990
	Total goods available for sale	80		$1,984

	Total goods sold	36


	Required:
1	Calculate both Cost of goods sold and Ending inventory using the Periodic FIFO Method.
2	Calculate both Cost of good sold and Ending Inventory using Periodic LIFO Method.
3	Use your calculations from 1-2 and complete the Income Statement.
	The company income tax rate:	0.25

1	FIFO Cost of Goods Sold - PERIODIC
	Units Sold Taken From:	# of Units	Cost per Unit	Total Cost


	Total Cost of Goods Sold FIFO


	FIFO Ending Inventory - PERIODIC
	Inventory Available	# of Units	Cost per Unit	Total Cost
	Beginning inventory
	+Purchase
	+Purchase
	(Less Cost of Goods Sold)
	Ending Inventory FIFO



2	LIFO Cost of Goods Sold - PERIODIC
	Units Sold Taken From:	# of Units	Cost per Unit	Total Cost


	Total Cost of Goods Sold LIFO


	LIFO Ending Inventory - PERIODIC
	Inventory Available	# of Units	Cost per Unit	Total Cost
	Beginning inventory
	+Purchase
	+Purchase
	(Less Cost of Goods Sold)
	Ending Inventory LIFO



3	Income Statement - Periodic Inventory Method
		FIFO	LIFO
	Sales revenue, net	25,000	25,000
	Cost of goods sold
	Gross profit
	Operating expenses	8,000	8,000
	Operating income before tax
	Income tax expense
	Net income

plumporpoise441

Assume that Dunk Coffee Shop completed the following periodic inventory transactions for a line of merchandiseâ inventory:

Jun.	1	Beginning merchandise inventory	25	units @	$22	each
	12	Purchase	3	units @	$24	each
	20	Sale	14	units @	$34	each
	24	Purchase	17	units @	$28	each
	29	Sale	20	units @	$34	each

1.	Compute ending merchandiseâ inventory, cost of goodsâ sold, and gross profit using the FIFO inventory costing method.
2.	Compute ending merchandiseâ inventory, cost of goodsâ sold, and gross profit using the LIFO inventory costing method.
3.	Compute ending merchandiseâ inventory, cost of goodsâ sold, and gross profit using theâ weighted-average inventory costing method.â (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearestâ dollar.)

QUESTION: Compute ending merchandiseâ inventory, cost of goodsâ sold, and gross profit using theâ (1) FIFO inventory costingâ method, (2) LIFO inventory costingâ method, andâ (3) weighted-average inventory costing method.â (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearestâ dollar.)

Begin by determining ending merchandise inventory and cost of goods sold under each of the three methods.

Requirement 1.
		FIFO

Plus:

Less:
Cost of goods sold

Requirement 2.

LIFO

Requirement 3.

Weighted-Average

Now compute the gross profit under each inventory costing method.

Requirement 1.
		FIFO
Sales Revenue
Cost of Goods Sold
Gross Profit

Requirement 2.

LIFO


	.

Requirement 3.

Weighted-Average

rubyfish762

1. What is the differencebetween inventory and cost of goods sold? Cost of goods sold andsales revenue?

2. Is gross profit an account?

3. ComstockCompany counted their inventory at the end of the year and had 220units. Included in that amount were 20 units Comstock held onconsignment from Davidson Inc. Comstock purchased 50 units ofinventory on December 27, FOB shipping point. How many units ofinventory should Comstock report on its year-end balancesheet?

4. Assume Comstock wasunable to count its ending inventory because it was destroyed in afire. Use the gross profit method to estimate the ending inventory.The gross profit rate is 52%.

Beginninginventory

Endinginventory

Netpurchases

Net sales

$ 10,000

110,000

175,000

Public Administration - Municipal ACC106 Chapter Notes - Chapter 5.1: Perpetual Inventory, Gross Margin, Gross Profit

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