Question

,0lescence, and the Tulde Blsed on future customer demand. The losses DuL B čost of sales M8llowing IFRS 1. What cost flow assumption(s) does Samsung apply in assigning costs to its inventories? 2. If at year-end 2016 there was an increase in the value of its inventories such that there was a reversal of W550 (W is Korean won) million for the 2015 write-down, how would Samsung account for this under IFRS? Would Samsung's accounting be different for this reversal if it reported under U.S. P2 GAAP? Explain. connect Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. (For specific identification, the March 9 sale consisted of 80 units from be- ginning inventory and 340 units from the March 5 purchase; the March 29 sale consisted of 40 units from the March 18 purchase and 120 units from the March 25 purchase.) PROBLEM SET A Problem 5-1A Perpetual: Alternative cost flows Date Activities Units Acquired at Cost Units Sold at Retail P1 Mar. 1 Beginning inventory. 100 units @ $50.00 per unit Mar. 5 Purchase. 400 units $55.00 per unit 420 units @ $85.00 per unit Mar. 9 Sales... Mar. Purchase. 120 units @ $60.00 per unit 200 units $62.00 per unit Mar. 25 Purchase.. 160 units @ $95.00 per unit Mar. 29 Sales. 580 units 820 units Totals.. 1. Compute cost of goods available for sale and the number of units available for sale. 2. Compute the number of units in ending inventory 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (Round all amounts to cents.) 4. Compute gross profit earned by the company for çach of the four costing methods in part 3 Required Check (3) Ending imventory FIFO, $14,800 LIFO $13.680 WA $14,352 (4) LIFO gross proft $17.980

Answer 1

1)
Date	Activities	Units (a)	Rate (b)	Amount (a*b)
Mar. 1	Beginning inventory	100	$50	$5,000
Mar. 5	Purchases	400	$55	$22,000
Mar. 18	Purchases	120	$60	$7,200
Mar. 25	Purchases	200	$62	$12,400
		820		$46,600
Therefore, cost of goods available for sale is $46,600 and number of units available for sale is 820 units.
2)
Date	Activities	Units (a)
Mar. 1	Beginning inventory	100
Mar. 5	Purchases	400
Mar. 18	Purchases	120
Mar. 25	Purchases	200
		820
	Less:
Mar. 9	Sales	420
Mar. 29	Sales	160
	Ending inventory in units	240

3)		Activities			Balance
FIFO:		Units (a)	Rate(b)	Amount (a*b)	Units (a)	Rate(b)	Amount (a*b)
Mar. 1	Beginning inventory				100	$50	$5,000
Mar. 5	Purchases	400	$55	$22,000	100	$50	$5,000
					400	$55	$22,000
Mar. 9	Sales	100	$50	$5,000
		320	$55	$17,600	80	$55	$4,400
Mar. 18	Purchases	120	$60	$7,200	80	$55	$4,400
					120	$60	$7,200
Mar. 25	Purchases	200	$62	$12,400	80	$55	$4,400
					120	$60	$7,200
					200	$62	$12,400
Mar. 29	Sales	80	$55	$4,400
		80	$60	$4,800	40	$60	$2,400
					200	$62	$12,400
	Total	580		$31,800	240		$14,800
Therefore, cost of goods sold is $31,800 with 580 units and ending inventory is $14,800 with 240 units.
		Activities			Balance
LIFO:		Units (a)	Rate(b)	Amount (a*b)	Units (a)	Rate(b)	Amount (a*b)
Mar. 1	Beginning inventory				100	$50	$5,000
Mar. 5	Purchases	400	$55	$22,000	100	$50	$5,000
					400	$55	$22,000
Mar. 9	Sales	400	$55	$22,000
		20	$50	$1,000	80	$50	$4,000
Mar. 18	Purchases	120	$60	$7,200	80	$50	$4,000
					120	$60	$7,200
Mar. 25	Purchases	200	$62	$12,400	80	$50	$4,000
					120	$60	$7,200
					200	$62	$12,400
Mar. 29	Sales	160	$62	$9,920	80	$50	$4,000
					120	$60	$7,200
					40	$62	$2,480
	Total Ending Inventory	580		$32,920	240		$13,680
Therefore, cost of goods sold is $32,920 with 580 units and ending inventory is $13,680 with 240 units.
		Activities			Balance
Weighted average:		Units (a)	Rate(b)	Amount (a*b)	Units (a)	Rate(b)	Amount (a*b)
Mar. 1	Beginning inventory				100	$50	$5,000
Mar. 5	Purchases	400	$55	$22,000	100	$50	$5,000
					400	$55	$22,000
Mar. 9	Sales	420	$54	$22,680
					80	$54	$4,320
Mar. 18	Purchases	120	$60	$7,200	80	$54	$4,320
					120	$60	$7,200
Mar. 25	Purchases	200	$62	$12,400	80	$54	$4,320
					120	$60	$7,200
					200	$62	$12,400
Mar. 29	Sales	160	$59.80	$9,568
					240	$59.80	$14,352
	Total Ending Inventory	580		$32,248	240		$14,352
Therefore, cost of goods sold is $32,248 with 580 units and ending inventory is $14,352 with 240 units.
		Activities			Balance
Specific identification:		Units (a)	Rate(b)	Amount (a*b)	Units (a)	Rate(b)	Amount (a*b)
Mar. 1	Beginning inventory				100	$50	$5,000
Mar. 5	Purchases	400	$55	$22,000	100	$50	$5,000
					400	$55	$22,000
Mar. 9	Sales	80	$50	$4,000	20	$50	$1,000
		340	$55	$18,700	60	$55	$3,300
Mar. 18	Purchases	120	$60	$7,200	20	$50	$1,000
					60	$55	$3,300
					120	$60	$7,200
Mar. 25	Purchases	200	$62	$12,400	20	$50	$1,000
					60	$55	$3,300
					120	$60	$7,200
					200	$62	$12,400
Mar. 29	Sales	40	$60	$2,400	20	$50	$1,000
		120	$62	$7,440	60	$55	$3,300
					80	$60	$4,800
					80	$62	$4,960
	Total Ending Inventory	580		$32,540	240		$14,060
Therefore, cost of goods sold is $32,540 with 580 units and ending inventory is $14,060 with 240 units.

4)

	FIFO	LIFO	Weighted average method	Specific identification
Sales Revenue [(420 units * $85) + (160 units * $95)	$50,900	$50,900	$50,900	$50,900
Less: Cost of Goods Sold	($31,800)	($32,920)	($32,248)	($32,540)
Gross Profit	$19,100	$17,980	$18,652	$18,360