Question

pect the cost of goods sold and ending inventory amounts to be higher or lower than these amounts? Taking It Further If Swan Valley Company wishes to change from FIFO to the weighted average cost formula, what factors must it consider before making this change? P6.5B (LO 2, 3) AP Bennett Basketball sells a variety of basketballs and accessories. Information follows for Bennett Basketball's purchases and sales during February and March for Up-Snap, one of its top brands of basketballs: Purchases Sales Units Unit Cost Units Unit Price Feb. 7 $32 50 $20 50 30 Mar. 10 19 Bennett uses a perpetual inventory system. On February 1, Bennett had 36 units on hand at a cost of $21 each. All purchases and sales during February and March were on account Instructions a. Determine the cost of goods sold and ending inventory under a perpetual inventory system using (1) FIFO and (2) weighted average. (Round the weighted average cost per unit to two decimal places.) b. Calculate gross profit using (1) FIFO and (2) weighted average. Taking It Further What factors should Bennett's owner consider when choosing a cost formula? P6.6B (LO 2, 5) AP You are given the following information for transactions by Schwinghamer Co. All transactions are settled in cash. Schwinghamer uses a perpetual inventory system and the FIFO cost formula Unit Cost/ Date Transaction Units Selling Price Oct. 1 Beginning inventory $14 Purchase Sale (140) Purchase Sale (70) Purchase S2 16 Instructions a. Prepare the required journal entries for the month of October for Schwinghamer Co. b. Determine the ending inventory for Schwinghamer. e. On October 31, Schwinghamer determines that the product has a net realizable value of Sto per unit What amount should the inventory be valued at on the October 31 balance sheet7 Prepare any required journal entries. d. Considering your answer from part (C). what amount will be reported on the October income state ment for cost of goods sold? Taking It Further What If Schwinghamer had used weighted average instead of FIFO? How would this affect the October 31 ending inventory on the balance sheet compared with FIFOZ P6.70 (LO 1, 4) AN The records of Khanna Company show the following amounts in its December 31

I just only need the answer of 6.5 B I just need it by today

Answer 1

Answer to Question P6.5B:

Sales Revenue = 18 * $32.00 + 50 * $30.00 + 23 * $29.00
Sales Revenue = $2,743

FIFO:

Date Goods Purchased # of units Cost per unit Cost of Goods Sold Cost per Cost of # of units unit Goods Sold Feb. 01 Feb. 07 Feb. 23 18 | 21.00 378 50 20.00 Inventory Balance Cost per Inventory # of units unit Balance 36 21.00 756 18 21.00 378 18 21.00 378 50 20.00 1000 21.00 0 18 20.00 360 18 20.00 360 19.00 456 20.00 0 19.00 361 19 361 Feb. 26 0 18 32 1 21.00 20.00 378 640 Mar. 10 24 / 19.00 Mar. 23 20.00 19.00 360 95 1851 Total

Cost of Goods Sold = $1,851
Ending Inventory = $361

Gross Profit = Sales Revenue - Cost of Goods Sold
Gross Profit = $2,743 - $1,851
Gross Profit = $892

Weighted Average:

Date Goods Purchased # of units Cost per unit Cost of Goods Sold Cost per Cost of # of units unit Goods Sold Feb. 01 Feb. 07 Feb. 23 18 | 21.00 378 50 20.00 Inventory Balance Cost per Inventory # of units unit Balance 21.00 756 21.00 378 21.00 378 50 20.00 1000 20.26 1378 20.26 365 20.26 365 24 19.00 456 42 19.54 821 19 19.54 372 19 372 Average Feb. 26 Mar. 10 50 20.26 1013 24 / 19.00 Average Mar. 23 Total 19.54 23 191 449 1840

Cost of Goods Sold = $1,840
Ending Inventory = $372

Gross Profit = Sales Revenue - Cost of Goods Sold
Gross Profit = $2,743 - $1,840
Gross Profit = $903