Question

Save Problem Chapters 16 Required information The following information applies to the questions displayed below) Now that operations for outdoor clinics and TEAM events are running smoothly Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure MU watches are waterproof so moisture from Kayaking, rain, fishing, or even diving up to 100 feet won't damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2022. All watches are sold for $490 each Jul. 17 Purchased 40 watches for 55,600 (3140 per watch) on account. Jul. 31 Sold 30 watches for $14,700 cash. Aug. 12 Purchased 30 watches for $4,500 ($150 per watch) cash. Aug, 22 Sold 20 watches for $9,800 on account. Sep. 19 Paid for watches purchased on July 17. Sep. 27 Receive cash of $21,000 for watches sold on account on August 22. Oct. 27 Purchased 70 watches for $11,200 (9160 per watch) cash. Nov. 20 Sold 80 watches for $39,200 cash. Dec. 4 Purchased 100 watches for $17,000 ($170 per watch) on account. Dec. 8 Sold 30 watches for $14,700 on account. Required: 1-a. Calculate sales revenue. cost of goods sold, and ending inventory as of December 31, 2022 assuming Suzie uses FIFO to account for Inventory < Prev 15 16 of 16 !! Next >

Answer 1

1-a) TABLE SHOWING CALCULATIONS OF SALES AND COST OF GOODS SOLD (FIFO)

date	PURCHASES			SALES			BALANCE
	Quantity(units)	Price($)	Amount($)	Quantity(units)	Price($)	Amount($)	Quantity(units)	Price($)	Amount($)
Jul-17	40	140	5600				40	140	5600
Jul-31				30	140	4200	10	140	1400
Aug-12	30	150	4500				10	140	1400
							30	150	4500
Aug-22				10	140	1400	20	150	3000
				10	150	1500
Oct-27	70	160	11200				20	150	3000
							70	160	11200
Nov-20				20	150	3000	10	160	1600
				60	160	9600
Dec-04	100	170	17000				10	160	1600
							100	170	17000
Dec-08				10	160	1600	80	170	13600
				20	170	3400
	total			160		24700	80	170	13600

Sale revenue = units sold x price = 160 x $490 = $78400

Cost of goods sold = $24700

Ending inventory = $13600 (80 units)

1-b)

Partial income statement
For the year ended dec 31,2022
particulars	($)
units	160
sales revenue	78400
- cost of goods sold	24700
gross profit	53700