Question

od 150 for a from March 1 ment for the year ending December 317 December the companys A company u the first Dep sed 110 units for $30 each on January 31 purchased 150 units for $25 each on February 28. r o wentaryong method what is the amount of Cost of Goods Sold on the income ry system) o OA 52.300 14300 C32.750 OD 17.050

Answer 1

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Answer 1
Periodic FIFO
Date	Cost of Goods available for sale	Cost of Goods sold	Inventory Balance
No. of Units	Cost per unit	Amount	No. of Units	Cost per unit	Cost of Goods sold	No. of Units	Cost per unit	Inventory Balance
1-Jan	110.00	30.00	3,300.00	110.00	30.00	3,300.00	-	30.00	-
28-Feb	150.00	25.00	3,750.00	40.00	25.00	1,000.00	110.00	25.00	2,750.00
Total	260.00		7,050.00	150.00		4,300.00	110.00		2,750.00
Cost of Goods sold is $ 4,300. So answer is option B.

Answer 2

Under specific identification method specific units are sold under a particular sales transaction. Its difficult to track shipping costs, freight costs for specific items. So specific identification method does not consider freight costs on merchandise inventory.

In the instant case, though the whole lot is sold in lump sum but still as the company uses specific identification method so cost of goods will be purchase cost of merchandise and will not include freight costs.

So answer is option C.

Account	Debit $	Credit $
Cost of goods sold	7,000.00
Merchandise inventory		7,000.00

Philip's Inc.	Amount $
Total Current Liabilities	146,000.00
	2010
Cash	44,000.00
Cash equivalents	77,000.00
Cash Assets	121,000.00
Cash Ratio	0.83
Cash Assets/Current Liabilities
So answer is option C.

Rawlins's Inc.
Perpetual Weighted Average
Date	Cost of Goods available for sale	Cost of Goods sold	Inventory Balance
No. of Units	Cost per unit	Amount	No. of Units	Cost per unit	Cost of Goods sold	No. of Units	Cost per unit	Inventory Balance
Jan 1	400.00	80.00	32,000.00				400.00	80.00	32,000.00
Mar 10				200.00	80.00	16,000.00	200.00	80.00	16,000.00
Jun 10	800.00	82.00	65,600.00				200.00	80.00	16,000.00
							800.00	82.00	65,600.00
							1,000.00	81.60	81,600.00	Use this for weighted average
Oct 30				600.00	81.60	48,960.00	400.00	81.60	32,640.00
Total			97,600.00	800.00		64,960.00	400.00		32,640.00
Ending Merchandise inventory is $ 32,640. So answer is option D.