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Exercise 6-1

Columbia Bank and Trust is considering giving Gallup Company a loan. Before doing so, it decides that further discussions with Gallup’s accountant may be desirable. One area of particular concern is the Inventory account, which has a year-end balance of $289,340. Discussions with the accountant reveal the following.

1.   Gallup sold goods costing $56,210 to Bazil Company FOB shipping point on December 28. The goods are not expected to reach Bazil until January 12. The goods were not included in the physical inventory because they were not in the warehouse.
2.   The physical count of the inventory did not include goods costing $86,060 that were shipped to Gallup FOB destination on December 27 and were still in transit at year-end.
3.   Gallup received goods costing $31,150 on January 2. The goods were shipped FOB shipping point on December 26 by Lynch Co. The goods were not included in the physical count.
4.   Gallup sold goods costing $53,880 to Lamey of Canada FOB destination on December 30. The goods were received in Canada on January 8. They were not included in Gallup’s physical inventory.
5.   Gallup received goods costing $42,220 on January 2 that were shipped FOB destination on December 29. The shipment was a rush order that was supposed to arrive December 31. This purchase was included in the ending inventory of $289,340.


Determine the correct inventory amount on December 31.

The correct inventory amount on December 31   $ [removed]

 

 

 

Exercise 6-4

Delmott sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Below is information relating to Delmott’s purchases of Xpert snowboards during September. During the same month, 101 Xpert snowboards were sold. Delmott uses a periodic inventory system.

Date   Explanation   Units   Unit Cost   Total Cost
Sept. 1   Inventory   14   $117   $ 1,638
Sept. 12   Purchases   43   120   5,160
Sept. 19   Purchases   51   122   6,222
Sept. 26   Purchases   21   123   2,583
    Totals   129       $15,603


(a) Compute the ending inventory at September 30 using the FIFO, LIFO and average-cost methods.  (Round average cost per unit to 3 decimal places, e.g. 125.153 and final answers to 0 decimal places, e.g. 125.)

The ending inventory at September 30 using the FIFO   $ [removed]
The ending inventory at September 30 using the LIFO   $ [removed]
The ending inventory at September 30 using the average-cost   $ [removed]

(b) Compute the cost of goods sold at September 30 using the FIFO, LIFO and average-cost methods.  (Round average cost per unit to 3 decimal places, e.g. 125.153 and final answers to 0 decimal places, e.g. 125.)

    FIFO   LIFO   AVERAGE-COST
Cost of goods sold   $ [removed]   $ [removed]   $ [removed]

 

 

 

 

 

Exercise 6-7

Eggers Company reports the following for the month of June.

Date   Explanation   Units   Unit Cost   Total Cost
June 1   Inventory   179   $7   $ 1,253
12   Purchases   552   9   4,968
23   Purchases   298   10   2,980
30   Inventory   343        
 
 
Calculate weighted-average unit cost.  (Round answers to 3 decimal places, e.g. 5.125.)

Weighted-average unit cost   $ [removed]
 
 
Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost.  (Round answers to 0 decimal places, e.g. 125.)

    FIFO   LIFO   Average-cost
The cost of the ending inventory   $ [removed]   $ [removed]   $ [removed]
The cost of goods sold   $ [removed]   $ [removed]   $ [removed]
 

 

 

 

Problem 6-5A

You have the following information for Vincent Inc. for the month ended October 31, 2014. Vincent uses a periodic method for inventory.

Date   Description   Units   Unit Cost or Selling Price
Oct. 1   Beginning inventory   74   $29
Oct. 9   Purchase   147   32
Oct. 11   Sale   123   43
Oct. 17   Purchase   123   33
Oct. 22   Sale   74   49
Oct. 25   Purchase   86   36
Oct. 29   Sale   135   49
 
 
Calculate the weighted-average cost.  (Round answer to 3 decimal places, e.g. 5.125.)

Weighted-average cost per unit   $ [removed]
 
 
Calculate ending inventory, cost of goods sold, gross profit under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost.  (Round answers to 0 decimal place, e.g. 125.)

    LIFO   FIFO   AVERAGE-COST
The ending inventory   $ [removed]   $ [removed]   $ [removed]
The cost of goods sold   $ [removed]   $ [removed]   $ [removed]
Gross profit   $ [removed]   $ [removed]   $ [removed]
 
 
Calculate gross profit rate under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost.  (Round answers to 1 decimal place, e.g. 51.2%)

    LIFO   FIFO   AVERAGE-COST
Gross profit rate   [removed]  %   [removed]  %   [removed]  %

 

 

 

 

Problem 6-9A

Lambert Center began operations on July 1. It uses a perpetual inventory system. During July, the company had the following purchases and sales.

    Purchases    
Date   Units   Unit Cost   Sales Units
July 1   10   $89    
July 6           7
July 11   4   $94    
July 14           4
July 21   6   $102    
July 27           4
 
 
Calculate average cost for each unit.  (For calculation and answers purpose round unit costs to 2 decimal places, e.g. 15.25 and ending inventory values to 0 decimal places, e.g. 515.)

July 1   $ [removed]
July 6   $ [removed]
July 11   $ [removed]
July 14   $ [removed]
July 21   $ [removed]
July 27   $ [removed]
 
 
Determine the ending inventory under a perpetual inventory system using (1) FIFO, (2) moving-average, and (3) LIFO.  (For calculation and answers purpose round unit costs to 2 decimal places, e.g. 15.25 and ending inventory values to 0 decimal places, e.g. 515.)

    FIFO   MOVING-AVERAGE   LIFO
The ending inventory under a perpetual inventory system   $ [removed]   $ [removed]   $ [removed]

 

 

 

 

 

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