Question

Use the following information to answer Excercises E6-16 through E6-18 Golf Unlimited carries an inventory of putters and other golf clubs. The sales price of cach putter is $1 19. Company records indicate the following for a particular line of Golf Unlimited's putters: Unit Cost Quantity Date Item S 53 24 Nov. 1 Balance 6 Sale 20 70 8 Purchase 30 17 Sale 30 30 Sale 2 E6-16 Measuring and journalizing merchandise inventory and cost of goods sold-FIFO Learning Objective 2 1. COGS $3,232 Requirements 1. Prepare a perpetual inventory record for the putters assuming Golf Unlimited uses the FIFO inventory costing method. Then identify the cost of ending inventory and cost of goods sold for the month. 332 2. Journalize Golf Unlimited's inventory transactions using the FIFO inventory cost- ing method. (Assume purchases and sales are made on account) E6-17 Measuring ending inventory and cost of goods sold in a perpetual inventory system-LIFO Learning Objective 2 1. Ending Merch. Inv. $106 Requirements 1. Prepare Golf Unlimited's perpetual inventory record for the putters assuming Golf Unlimited uses the LIFO inventory costing method. Then identify the cost of ending inventory and cost of goods sold for the month. 2 2. Journalize Golf Unlimiteds inventory transactions using the LIFO inventory cost- ing method. (Assume purchases and sales are made on account.) E6-18 Measuring ending inventory and cost of goods sold in a perpetual inventory system-Weighted-average Learning Objective 2 1. COGS $3,236 Requirements 1. Prepare Golf Unlimited's perpetual inventory record for the putters assuming Golf Unlimited uses the weighted-average inventory costing method. Round weighted- average cost per unit to the nearest cent and all other amounts to the nearest dollar," Then identify the cost of ending inventory and cost of goods sold for the month. 2. Journalize Golf Unlimited's inventory transactions using the weighted-average inventory costing method. (Assume purchases and sales are made on account.)

Answer 1

Еб-16. 1) Unit Price Units Beginning Balance 24 $ 1-Nov 53 30 $ Add: Purchases 8-Nov 70 Less: Sales (20) $ (30) (2) $ 6-Nov 119 17-Nov 119 30-Nov 119 Ending Inventory 2. Under FIFO method the ending inventory is valued at the most recent purchase price i.e $70 Ending Inventory value 2 units $70 $ 140 Cost of Goods sold= Beginning Inventory +Purchases- Ending Inventory 1,272 (24 units $53) 2,100 (30 units * $70) (140) $ Beginning Inventory Add: Purchases Less: Ending Inventory $ $ Cost of Goods sold 3,232

2) Inventory To Accounts Payable (Being purchase of 30 units @$70) $2,100 $2,100 $ 6,188 Accounts Receivable $ 6,188 To Sales (Being sales made of 20+30+2 units @ $119) $ 3,232 Cost of Goods sold To Inventory 3,232 (Being Cost of goods sold recorded)

E6-17 1) Unit Price Units 24 $ Beginning Balance 1-Nov 53 30 $ Add: Purchases 8-Nov 70 (20) $ (30) $ (2)$ Less: Sales 6-Nov 119 17-Nov 119 30-Nov 119 Ending Inventory 2 Under LIFO method the ending inventory is valued at the most earliest purchase price i.e $53 Ending Inventory value 2 units $53 106 Cost of Goods sold = Beginning Inventory +Purchases - Ending Inventory 1,272 (24 units * $53) 2,100 (30 units * $70) (106) $ $ Beginning Inventory Add: Purchases $ Less: Ending Inventory Cost of Goods sold 3,266

2) Inventory To Accounts Payable 2,100 $ 2,100 (Being purchase of 30 units @$70) $ 6,188 Accounts Receivable To Sales $6,188 (Being sales made of 20+30+2 units @$119) Cost of Goods sold 3,266 To Inventory 3,266 (Being Cost of goods sold recorded)

Еб-18 1) Unit Price Units Beginning Balance Less: Sales 24 $ 1-Nov 53 (20) 30 $ 6-Nov Add: Purchases 8-Nov 70 (30) (2) 17-Nov 30-Nov Ending Inventory 2 Average inventory price at the first sale on 6th nov is $ 53. the entry is as under Accounts Receivable $2,380 $ To Sales 2,380 (Being sale os 20 units @$119) Cost of goods sold To inventory (Being sale of 20 units moved to COGS at average price of $53) $ 1,060 $ 1,060

Entry at the time of purchase of 30 units $ 2,100 Inventory $ 2,100 To Accounts Payable (Being purchase of 30 units @$70) Entry for sale on 17th Nov $ 3,570 Accounts Receivable $3,570 To Sales (Being sales made of 30 units @ $119) Cost of Goods sold 2,040 To Inventory 2,040 (Being Cost of goods sold recorded for 30 units @$68*) Entry for sale on 30th Nov Accounts Receivable 238 $ To Sales 238 (Being sales made of 30 units @ $119)

Cost of Goods sold 136 To Inventory (Being Cost of goods sold recorded for 2 units @$68 * 136 Cost of goods sold from the above $ entries= 3,236 Ending Inventory Beginning inventory +Purchases-Cost of Goods sold Beginning inventory 1,272 $ 2,100 (3,236) Add: Purchases Less: COGS Ending Inventory 136 Average Price for 17th Nov and 30th Nov sales Unit price Amount Units 4 S 53 $ Units left after 6th Nov sale 212. Add:Purchases on 8th Nov 30 $ 70 2,100 $ 2,312 34 Average Inventory cost ($2,312/34 units) $ 68