Question

ABC International

357 Gravel Hill Rd

Huntington Valley, PA 19006

Sold to:	Invoice no:	13-59784
Green Co.	Date:	2/13/20X6
85 North Parkway	PO:	500213
Newberry, FL 32669	Terms:	Net 30

Product ID	Description	Quantity	Unit price	Amount
745-256	Large units	12,000	$10.25	$123,000.00
			Amount due	$123,000.00

Johnson Manufacturing Co.

157 Moorehead Dr

Anderson, SC 54895

Sold to:	Invoice no:	JMC265
Green Co.	Date:	05/27/20X6
85 North Parkway	PO:	500527
Newberry, FL 32669	Terms:	Net 30

Product ID	Description	Quantity	Unit price	Amount
456253	Large units	15,000	9.90	$148,500.00
			Amount due	$148,500.00

Lawhorn Company

148 South Broadway

Gallipolis, OH 45859

Sold to:	Invoice no:	9261946
Green Co.	Date:	08/18/20X6
85 North Parkway	PO:	500818
Newberry, FL 32669	Terms:	Net 30

Product ID	Description	Quantity	Unit price	Amount
LW2563.25	Large units	14,000	$9.50	$133,000.00
			Amount due	$133,000.00

JSL Inc.

112 Industrial Blvd

Piscataway, NJ 08079

Sold to:	Invoice no:	INV523697
Green Co.	Date:	12/21/20X6
85 North Parkway	PO:	5001221
Newberry, FL 32669	Terms:	Net 30

Product ID	Description	Quantity	Unit price	Amount
745-256	Large units	6,000	$9.70	$58,200.00
			Amount due	$58,200.00

Green Co.
Trial Balances (partial)
12/31/20X6
Sales (34,000 units × $20)	$680,000
Sales discounts	9,900
Purchase discounts	20,000
Freight-in	7,000
Freight-out	14,600

Green Co. sells one product purchased from various suppliers. Green records and reports inventory using the LIFO periodic method. It records cash discounts using the gross method. At the end of Year 20X6, Green estimated the following per unit amounts:

Replacement cost	$10.00
Net realizable value (NRV)	10.80
Normal profit margin	1.00
Historical cost - beginning inventory on 1/1/20X6	10.20

Green reports losses from write-downs of inventory to market directly in cost of goods sold. The inventory on January 1, 20X6, consisted of 8,000 units. The financial accounting department is doing a cost of goods sold analysis based on a partial trial balance and the available inventory purchase receipts.

Determine the amount for each item in the cost of goods sold calculation at December 31, Year 20X6. Enter the appropriate amounts in the designated cells below. Enter all amounts as positive numbers.

Item	Cost
1. Beginning inventory
2. Purchases
3. Purchase discounts
4. Freight-in
5. Goods available for sale
6. Ending inventory
7. Cost of goods sold

Answer 1

The answer to the above problem has been enclosed in the hand written sheets. There are a total of 5 sheets to be referred by the student.The problem is solved in easy and simple steps so that the student can easily understand.
Calculations of all mequired items as on 31/12/2046 » Beginning inventory. 8000 units (given) Inventory as $ Valuation of Inventory value of Beginning $ 81600 inventory on lilnox 6 10.20 Note :- Valuation is to be done on basis of Cost or Net Realisable Value whichever is power and so historical cost is considered here Purchases ѕ Sr. No. Amount Invoice No. quantity unit prie 10.25 123000 12000 1 13-59784 9.90 148500 2 15 000 JMC 265 9.50 133000 926 1946 3 14000 9.70 58200 6000 4 시 IN V 523697 Total 47000 462700 & value of purchases made during the year $ 40 2700 20x6

3 Purchase discount The purchase discount is given in the Trial Balance $ 20,000 4 Freight in The amount of freight is is already provided in the Trial Balanie $ 7000 Goods Available for sale Goods arailable for sale = Beginning Inventory & Purchases during the year Particulars. units sr. No 8000 Amount ($) 81600 462 700 1 Beginning inventory Purchases 47000 2 55000 544300 Total 55000 units ? Goods available for sale 6 lending Inventory ronding Inventory - Opening inventory it Purchases sales 8000 + 47000 - 34000 21000 units

Value of cloding Inventory since the company followes LIFO method our calculations will be made as per the company's policy. sr. No stantity sold Quantity Balanne units 6000 6000 14000 1000 15 000 1 2 14000 14000 3 12000 4 12000 8000 1 8000 S 21000 units 1000 units X $9.90 12000 units & $ 40-25 8 600 units & $ 10.00 $9900 $123000 $81600 $ 214500 Value of closing inventory 3

7 Cost of , Goods sold. Cost of Goods sold Opening Inventory (4) Purchases during the year Cost of Goods available for sale (~) Ending Inventory Cost of g Goods sold . 81600 (t) 462700 (Ans No 5 C Ars Nos) 544300 (2) 214500 Ars No-6) 329,800 % Cost of Goods sold $329800 1 4

Summary of solutions. $81600 1 Begirining loventory 2) Purchases 3 Purchase discounts $ 462700 $ 20000 4 Freight in $ 7000B 55000 units 6) Goods available for sale 21000 units 6) Ending Inventory $324870 7) Cost of Goods sold