The beginning inventory at Funky Party Supplies and data on purchases and sales
ID: 2464070 • 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
Exhibit 4
Date
Transaction
Number of Units
Per Unit
Total
Jan. 1 Inventory 2,500 $64.00 $160,000 10 Purchase 7,600 72.00 547,200 28 Sale 3,700 128.00 473,600 30 Sale 1,400 128.00 179,200 Feb. 5 Sale 500 128.00 64,000 10 Purchase 18,500 74.00 1,369,000 16 Sale 8,900 133.00 1,183,700 28 Sale 8,500 133.00 1,130,500 Mar. 5 Purchase 15,000 75.60 1,134,000 14 Sale 10,000 133.00 1,330,000 25 Purchase 3,300 76.00 250,800 30 Sale 7,650 133.00 1,017,450Explanation / Answer
2)
Total cost of merchandise sold = $2987180
Journal:
Accounts receivable ...................................Dr. $5378450
Sales...........................................................................Cr. $5378450
Cost of goods sold.....................................Dr. $2987180
Inventory.....................................................................Cr. $2987180
3)
Gross profit = sales - cost of goods sold = $5378450 - $2987180 = $2391270
4)
Ending inventory at cost = $473820
5) The purchase price is continuously increasing. If LIFO method is used then, the last items purchased will be sold at first. That means the mercahndise with higer cost will be sold at first in this case. Consequently the inventory cost will be lower if LIFO is used.
Date Goods Purchased Cost of goods sold Inventory Balance No. Of units Cost perunit no. Of units cost per unit cost of goods sold no of units cost per unit ($) inventory balance Jan-01 2500 @ 64.00 = 160000 Jan-10 7600 @ 72 7600 @ 72.00 = 547200 Total 10100 707200 Jan-28 2500 @ 64 = 160000 1200 @ 72 = 86400 Jan-30 1400 @ 72 = 100800 5000 @ 72.00 = 360000 Total 5100 347200 5000 360000 Feb-05 500 @ 72 = 36000 4500 @ 72.00 = 324000 Total 5600 383200 4500 324000 Feb-10 18500 @ 74 18500 @ 74.00 = 1369000 Total 5600 383200 23000 1693000 Feb-16 4500 @ 72 = 324000 4400 @ 74 = 325600 14100 @ 74.00 = 1043400 Feb-28 8500 @ 74 = 629000 5600 @ 74.00 = 414400 Total 23000 1661800 5600 414100 Mar-05 15000 @ 75.6 15000 @ 75.60 = 1134000 Mar-14 5600 @ 74 = 414400 4400 @ 75.6 = 332640 10600 @ 75.60 = 801360 Total 33000 2408840 10600 801360 Mar-25 3300 @ 76 3300 @ 76.00 = 250800 Total 33000 2408840 13900 1052160 Mar-30 7650 @ 75.6 = 578340 2950 @ 75.60 = 223020 3300 @ 76 = 250800 Total 40650 2987180 6250 473820Related Questions
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