Problem 6-5A You have the following information for Vincent Inc. for the month e
ID: 2492404 • Letter: P
Question
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
50
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
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
Date
Description
Units
Unit Cost or Selling Price
Oct. 1 Beginning inventory 75 $30 Oct. 9 Purchase 151 33 Oct. 11 Sale 126 44 Oct. 17 Purchase 126 34 Oct. 22 Sale 75 50 Oct. 25 Purchase 88 36 Oct. 29 Sale 13850
Explanation / Answer
Date
Description
Units
Unit cost
Value
Oct. 1
Beginning inventory
75
$ 30
$ 2,250
Oct. 9
Purchase
151
$ 33
$ 4,983
Oct. 17
Purchase
126
$ 34
$ 4,284
Oct. 25
Purchase
88
$ 36
$ 3,168
440
$ 14,685
Date
Description
Units
Selling price
Value
Oct. 11
Sale
126
$ 44
$ 5,544
Oct. 22
Sale
75
$ 50
$ 3,750
Oct. 29
Sale
138
$ 50
$ 6,900
339
$ 16,194
1) LIFO
Cost of goods available for sale = $14,685
Ending inventory units = 440 units – 339 units = 101 units
Ending inventory = ($30*75 units) + ($33 * 26 units) = $3,108
Cost of goods sold = Cost of goods available for sale – Ending Inventory = $14,685 - $3,108 = $11,577
Gross profit = Sales – Cost of goods sold = $16,194 - $11,577 = $4,617
Gross profit rate = Gross profit/Sales = $4,617/$16,194 = 28.5%
2) FIFO
Ending inventory = ($36*88 units) + ($34*13 units) = $3,610
Cost of goods sold = $14,685 - $3,610 = $11,075
Gross profit = $16,194 - $11,075 = $5,119
Gross profit rate = $5,119/$16,194 = 31.6%
3) Average-Cost method
Average cost per unit = $14,685/440 units = $33.38 per unit
Ending inventory = $33.38*101 units = $3,371
Cost of goods sold = $14,685 - $3,371 = $11,314
Gross profit = $16,194 - $11,314 = $4,880
Gross profit rate = $4,880/$16,194 = $30.1%
Date
Description
Units
Unit cost
Value
Oct. 1
Beginning inventory
75
$ 30
$ 2,250
Oct. 9
Purchase
151
$ 33
$ 4,983
Oct. 17
Purchase
126
$ 34
$ 4,284
Oct. 25
Purchase
88
$ 36
$ 3,168
440
$ 14,685
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.