Exercise 5-20A (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-6The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations:Jan. 20 PurchasedApr. 21 PurchasedJuly 25 PurchasedSept. 19PurchasedDuring the year. The Shirt Shop sold 800 T-shirts for $21 each..RequiredRequired A480 units140 units240 units100 unitsa. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flowassumptions: (1) FIFO, (2) LIFO, and (3) weighted average.b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.Complete this question by entering your answers in the tabs below.Required BEnding inventory@ $11 =@ $13 =@ $15 =@ $16 =FIFOCompute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flowassumptions: (1) FIFO, (2) LIFO, and (3) weighted average. (Round intermediate calculations to 2 decimal places and finalanswers to the nearest whole dollar amount.)$5,2801,8203,6001,600LIFO$ 1,760WeightedAverage

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Description: Exercise 5-20A (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-6The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations:Jan. 20 PurchasedApr. 21 PurchasedJuly 25 Purc

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Exercise 5-20A (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5- 6 The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: Jan. 20 Apr. 21 July 25 Sept. 19 Purchased Purchased Purchased Purchased Required 480 units 140 units 240 units 100 units $11 = $5,280 $13= 1,820 3,600 1,600 $15 = $16 = During the year. The Shirt Shop sold 800 T-shirts for $21 each.

Exercise 5-20A (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5- 6 The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: Jan. 20 Apr. 21 July 25 Sept. 19 Purchased Purchased Purchased Purchased Required 480 units 140 units 240 units 100 units $11 = $5,280 $13= 1,820 3,600 1,600 $15 = $16 = During the year. The Shirt Shop sold 800 T-shirts for $21 each.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 64E: ( Appendix 6B) Inventory Costing Methods: Periodic System Harrington Company had the following data...

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Weighted average cost method with perpetual inventory The beginning inventory for Funky Party Supplies and data on purchases and sales for a three-month period are shown in Problem 7-1A. Instructions 1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in Exhibit 6, using the weighted average cost method. 2. Determine the total sales, the total cost of merchandise sold, and the gross profit from sales for the period. 3. Determine the ending inventory cost as of March 31, 2016.
LIFO perpetual inventory The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown in Problem 6-IB. Instructions 1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out method. 2. Determine the total sales, the total cost of goods sold, and the gross profit from sales for the period. 3. Determine the ending inventory cost on June 30.
FIFO and UFO costs under perpetual inventory system The following units of an item were available for sale during the year: Beginning inventory 7,200 units at 160 Sale 4,800 units at 300 First purchase 16,000 units at 168 Sale 12,000 units at 300 Second purchase 15,000 units at176 Sale 11,000 units at 300 The firm uses the perpetual inventory system, and there are 10,400 units of the item on hand at the end of the year. What is the total cost of the ending inventory according to (A) FIFO and (B) UFO?
Lower-of-cost-or-market inventory Data on the physical inventory of Katus Products Co. as of December 31 follows: Description Inventory Quantity Market Value per Unit (Net Realizable Value) A54 37 56 C77 24 178 F66 30 132 H83 21 545 K12 375 5 Q58 90 18 S36 8 235 V97 140 20 Y88 17 744 Quantity and cost data from the last purchases invoice of the year and the next-to-the-last purchases invoice are summarized as follows: Description Last Purchases Invoice Next-to-the-Last Purchases Invoice Quantity Purchased Unit Cost Quantity Purchased Unit Cost A54 30 60 40 58 C77 25 174 15 180 F66 20 130 15 128 H83 6 547 15 540 K12 500 6 500 7 Q58 75 25 80 26 S36 5 256 4 260 V97 100 17 115 16 Y88 10 750 8 740 Instructions Determine the inventory at cost and also at the lower of cost or market, using the first-in, first-out method. Record the appropriate unit costs on the inventory sheet, and complete the pricing of the inventory. When there are two different unit costs applicable to an item, proceed as follows: 1. Draw a line through the quantity, and insert the quantity and unit cost of the last purchase. 2. On the following line, insert the quantity and unit cost of the next-to-the-last purchase. 3. Total the cost and market columns and insert the lower of the two totals in the LCM column. The first item on the inventory sheet has been completed as an example. Inventory Sheet December 31 Description Unit Inventory Quantity Cost per Unit Market Value per Unit(Net Realizable Value) Total Cost Market LCM A54 37 30 60 56 1,800 1,680 7 58 56 406 392 2,206 2,072 2,072
( Appendix 6B) Inventory Costing Methods: Periodic System Harrington Company had the following data for inventory during a recent year: Assume that Harrington uses a periodic inventory accounting system. Required: 1. Using the FIFO, LIFO, and average cost methods, compute the ending inventory and cost of goods sold. ( Note: Use four decimal places for per-unit calculations and round all other numbers to the nearest dollar.) 2. CONCEPTUAL CONNECTION Which method will produce the most realistic amount for income? For inventory? 3. CONCEPTUAL CONNECTION Which method will produce the lowest amount paid for taxes?