Question

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P6-71B (similar to) Air Force Surplus began July 2018 with 100 stoves that cost S15 each. During the month, the company made the following purchases at cost: E: (Click the icon to view the purchases.) The company sold 336 stoves, and at July 31, the ending inventory consisted of 64 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 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 Data Table - X July 6 $ 120 stoves @ 130 stoves @ 50 stoves @ $25 = $30 = $32 = 3,000 3,900 1,600 Print Done * 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 income statement for July. Report gross profit. Operating expenses totaled $3,750. The company uses average costing for inventory. The income tax rate is 40%. Print Done

Answer 1

Periodic inventory systemi Il calculation of cost of goods sold and Ending inventory a) Average cost : cast per unit & Total cost of goods available for sale. Now of units. (100x $15) + (120x $25) + (130 100+ 120+ 130+50. $10,000 ist (120x825) + (130x830) + (508$32) $6490862 $25 "Yoo $81400 cost of goods sold 336 stoves @ cost of $599 Ending inventory & 964 stock of total cost a [$11600 5) FIFO method cost of goods sold units inventory ( 100x15) + ( 120x825) + (8 116*$30] => 117,980 (336) (50× $32) + C1GX $30) $2,020 ending C) Elro method :- cost of goods sold (50 x $32) + (130x830) + (120x825) + (36 x 915) 189,040) (6ux &15) (1960) Ending inventory

OODA 2) Due to the high prices are considered first white computing the cost of goods sold. So, the cost of good sold are higher when considered with other inventory systems.. (2) 2009 24 octo 00012 Average cost inventory 13 Income statement using sori particulars Amount $15, 20 9452 $15,120 81400 sales (336x 845) dos & blor cessi cost of goods sold Gross prosit to 2012 pa so proti less: Operating expenses. Profit before tax Less: income tax expense @ 40% ) & Net mcome ospirti → 89,668 31750 $5,918 2,367 $3,850 61720 3750 2970. 1,188 11 1,782 : $8, 54

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