Question

Use the following to answer the questions 6. 7. 8 and 9 helow:ni 1t h Shown below is activity for one of the products of Denver Office Equipment: January 1 balance, 500 units @$55= $27,500 Purchases: January 10: 500 units @ $60 January 20: 1,000 units @ $63 Sales: January 12: 800 units January 28: 750 units the fo of cos ble 6) Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Denver uses FIFO. (2 points) 105 000,02 000.ca 000.002 000,201 000,005 00n 28 pany es the on hand a ble from compay re ust was ips 7) Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Denver uses LIFO and a perpetual inventory system. (3 points) 4300 ot ventory 8) Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Denver uses average cost and a perpetual inventory system. (3 points) 2ll 01.FR G0 02 02t.17 G0812 6OLS 00 Page

Answer 1

Answer :- © FIFO method T Purchases cost of goods sold units Unit cost Total Ending inventory Units Unitost Total 500 $55 $27500 Date Units Unit cost Total Jani 27500 39000 Janio 500 500 $55 50060 $60 $39000 Jan 12 500 300 55 60 27500 18000 200 60 12000 Jan 20 1000 63 63000 60 63 12000 63000 - Jan 28 60 63 200 1000 12000 450 34,650 | $92,150 usd - 200 550 1550 63 28350 Total $28,350 Ending inventory = $ 28,350 cost of goods sold = $ 92150,

Perpetud - LIFO melhod ;- Ending mventory units unit cost total cost of goods sold Totall Units Unitrost Purchases / Units Unit cost Total Date $27500 Jan ! 500 500 900 $55 55 60 Janio 500 $60 27500 30,000 +30000 $30000 11000 Jan 12 500 $60 30,000 200 55 Bob 655 16500 655 1200 11000 63 000 Jan 20 1000 1000 15750 s 63 Jan 28 63 63000 1000 1750 63 47250 200 1250 1950 $93750 450 i.cost of goods sold = $93750 Ending Inventory = $ 26,750. Total 26,750 Perpetual- Average cost method:- purchases - cost 1 Units Total Unit cost Units Jan ! 39000 500 $30,000 Jan 10 to of goods sold , Ending inventory Unit cost Total Units Uniteost Total 7500 455 $27500 500 5 2700 500 1000p 5715 57,500 5705 46000 200 $75 11520 200 575 1100 1ooo 63 63000 12000 62.0833 74,500 Jan 12 Jan 20 1000 1800 63000 63 350 62.0833 De Luo 62-0833 02.0833 27939 27938 Jan 28 $46562 450 $ 27,938 Total Tisso $92,562/450 ... cost of goods sold= $94562 Ending inventory = $27938

Periodic - 4FO melhod :- Units sold = 800 +-150 = 1530 units cost of goods sold = 1000 x 63 + 500 x $60 + 30 x $55 totoo = $95, -15D Unit in Ending inuentang = (500+500 +1000) -(800+750) = 450 units Cost OL Ending inventory = 450 x $5 = $24,750 (1) Gross profit = Net Sale - Cost of goody cold () GL Gross profit for the $625,000 - $509000 = $125,000 Gross profit ratio = Gross profil cxloo Net sales $125000 x 100 $625too = 20 l (2) Inventory Turnover sautio = cost of goods sold Average enventory Average mventory beginning muentory + Ending 'muentory 7000 + 90ooo = $80,000 .: Inventory Twarower ra how $50,0,000 $80,000 625