The beginning inventory at Funky Party Supplies and data on purchases and sales
ID: 2460053 • Letter: T
Question
The beginning inventory at Funky Party Supplies and data on purchases and sales for a three-month period ending March 31, 2016, are as follows:
Date
Transaction
Number of Units
Per Unit
Total
The method of inventory costing based on the assumption that the cost of merchandise sold is the cost of the most recent purchases.
to be higher or lower?
Please use the chart of accounts for exact wording.
Date
Transaction
Number of Units
Per Unit
Total
Jan. 1 Inventory 2,600 $58.00 $150,800 10 Purchase 7,200 66.00 475,200 28 Sale 3,950 116.00 458,200 30 Sale 1,300 116.00 150,800 Feb. 5 Sale 500 116.00 58,000 10 Purchase 17,500 68.00 1,190,000 16 Sale 9,200 121.00 1,113,200 28 Sale 8,000 121.00 968,000 Mar. 5 Purchase 14,400 69.60 1,002,240 14 Sale 10,100 121.00 1,222,100 25 Purchase 3,300 70.00 231,000 30 Sale 7,900 121.00 955,900Explanation / Answer
Solution:
1.
2. Accounts Receivable ....................... 3,929,400
Sales ....................................................... 3,929,400
Cost of merchandise sold .....................3,084,940
Merchandise inventory ..........................3,084,940
3. Gross proft = $3,929,400 - $3,084,940
Gross profit = $844,460
4. Ending Inventory = 8,650 x 70 = $605,500
Purchases Cost of Merchandise Sold Inventory Quantity Unit cost Total cost Quantity Unit cost Total cost Quantity Unit cost Total cost 2600 58 150800 7200 66 475,200 2600 58 150800 7200 66 475200 2600 58 150800 1350 66 89100 3950 66 260700 1300 66 85800 4550 66 300300 500 66 33000 4050 66 267300 17500 68 1190000 4050 66 267300 17500 68 1190000 4050 66 267300 8300 68 564400 12350 68 839800 8000 68 544000 4350 68 295800 14400 69.6 1002240 4350 68 295800 14400 69.6 1002240 4350 68 295800 5750 69.6 400200 8650 69.6 602040 3000 70 210000 8650 69.6 602040 3000 70 210000 8650 69.6 602040 750 70 52500 8650 70 605500 3084940 605500Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.