Question

Dy the average cost method iS 5. A purchase order for $7,000 of merchandise was mailed to a supplier on December 22, 2008. The merchandise was shipped by the supplier on December 29, 2008, under terms of FOB shipping point, and the merchandise was received on January 3, 2009. If 50% is added to its cost by the purchaser to determine selling price, the amount to be included in the inventory of the purchaser on December 31, 2008, is.. Beginning inventory. purchases, and sales of a commodity are presented below Inventory: July 1 Sales: July 6 5. 6. 15 units at $46 10 units at $65 30 units at $65 40 units at $65 30 units at $48 50 units at $49 12 Purchases: July 9 18 Assuming that the perpetual inventory system is used, the cost of the inventory balance on July 31 by the FIFO method is Based on the data in Question 6, the cost of the inventory balance on July 31 by the LIFO method is.. Summarized data on sales and merchandise available for sale are 7. 8. as follows: Retail $180,000 240,000 250,000 Cost $100,000 152,000 Merchandise inventory Purchases (net) Sales (net) June 1 June 1-30 June 1-30 The estimated cost of the merchandise inventory on June 30 by the retail method is 8

Answer 1

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Ans 5
$ 7,000 is to be shown as Inventory in Transit by the Purchaser.
Ans 6- FIFO	Date	Units	Rate	Amount
Beginning Inventory	July 1	15.00	46.00	690.00
Sales	July 6	(10.00)	46.00	(460.00)
Purchase	July 9	30.00	48.00	1,440.00
Sales	July 12	(5.00)	46.00	(230.00)
Sales	July 12	(25.00)	48.00	(1,200.00)
Purchase	July 18	50.00	49.00	2,450.00
Sales	July 22	(5.00)	48.00	(240.00)
Sales	July 22	(35.00)	49.00	(1,715.00)
Ending Inventory	July 31	15.00		735.00
Ans 7- LIFO	Date	Units	Rate	Amount
Beginning Inventory	July 1	15.00	46.00	690.00
Sales	July 6	(10.00)	46.00	(460.00)
Purchase	July 9	30.00	48.00	1,440.00
Sales	July 12	(30.00)	48.00	(1,440.00)
Purchase	July 18	50.00	49.00	2,450.00
Sales	July 22	(40.00)	49.00	(1,960.00)
Ending Inventory	July 31	15.00		720.00
Ans 8	Cost	Retail
Beginning Inventory	100,000.00	180,000.00	A
Purchase	152,000.00	240,000.00	B
Cost of goods available for sale	252,000.00	420,000.00	C=A+B
Cost to Retail Ratio	252,000.00
	420,000.00
Cost to Retail Ratio	0.60
Sales		250,000.00	E
Ending Inventory		170,000.00	D=C-E
Multiply with Cost to Retail Ratio		0.60	F
Ending Inventory		102,000.00	G=D*E