Jake Co. uses a periodic inventory system. The purchases of a particular peouct
ID: 2514320 • Letter: J
Question
Jake Co. uses a periodic inventory system. The purchases of a particular peouct Beginning inventory during the year are shown below Apr. 18Purchase Aug 1 Purchase Oct. 23Purchase 600 units (@ $ 800 500 units $10.00 700 units $120o 200 units $1400 The number of units sold during the year at $36 eaclh 32. units were sold on July 5 and 400 units were sold on September 14. Refer to the above data a. $11,000 b. $14,200 Compute the coat of the ending invenlory based on the FIFO mcthod of inventory valuation $6,800 d. $10,000 e. None of the above 33. Refer to the above dats. Compate th e gross margin for the curront year based on the FIFO method of inventiory valuation. a $32,200 b. $28,800 $17,800 d. $29,000 e None of the above 34. Refer to the above data. Compute the cost of goods sold for the current year based on the LIFO method of inventory valuation a. $11,000 b. $14,200 . $6,800 d $10,000 e. Nome of the above 35 Refer to the ahove data. Compute the cost of the ending inventory based on the average-cost method of inventory valuation a. $10,000 b. $8,400 e $12,600 d. $8,000 e None of the above 36. Refer to the above dats. Compute the total sales revenue under the LIFO method of inventory valuation a $28,800 b. $36,000 $24,000 d. $43,200 e. None of the above Sonia Car Repair reports net sales of $1,000,000, cost of goods sold of $$70,000, and net income of $80,000. The company's gross margin 1s. a. $350,000 b. $430,000 c. $920,000 d. $570,000 e. Some other amount Tanya Corp. had accounts receivable of $400,000 and an allowance for doubtful accounts of S17,000 just before writing off as worthless an aocount receivable from Kevin Company of $2,400. The values of the gross accounts roceivable before and after the write-off were a. $417,000 before and $414,600 after b. $383,000 before and $380,600 after c. $383,000 before and $397,600 afler d. $400,000 before and $402,400 after e. None of the aboveExplanation / Answer
Answer to Question No. 32:
Option d i.e. $10,000
Units available for Sale = Beginning Inventory + Units Purchased
Units Purchased = 500 + 700 + 200 = 1,400 Units
Units available for Sale = 600 + 1,400
Units available for Sale = 2,000 Units
Units Sold = 1,200 Units
Ending Inventory = 2,000 – 1,200 = 800 Units
Ending Inventory = (600 * $12) + (200 * $14)
Ending Inventory = $7,200 + $2,800
Ending Inventory = $10,000
Answer to Question No. 33:
Option a i.e. $32,200
Gross Margin = Sales – Cost of goods Sold
Sales = 1,200 * $36
Sales = $43,200
Cost of Goods Sold = Units available for Sale – Ending Inventory
Units available for Sale = Beginning Inventory + Cost of Purchases
Cost of Purchases = (500 * $10) + (700 * $12) + (200 * $14)
Cost of Purchases = $5,000 + $8,400 + $2,800
Cost of Purchases = $16,200
Units available for Sale = $4,800 + $16,200 = $21,000
Cost of Goods Sold = $21,000 - $10,000 = $11,000
Gross Margin = $43,200 - $11,000
Gross Margin = $32,200
Answer to Question No. 34:
Option b i.e. $14,200
Units Sold = 1,200 Units
Cost of Goods Sold = (200 * $14) + (700 * $12) + (300 * $10)
Cost of Goods Sold = $2,800 + $8,400 + $3,000
Cost of Goods Sold = $14,200
Answer to Question No. 35:
Option b i.e. $8,400
Weighted Average Cost per Unit = Cost of Goods available for Sale / Units available for Sale
Cost of Goods available for Sale = (600 * $8) + (500 * $10) + (700 * $12) + (200 * $14)
Cost of Goods available for Sale = $4,800 + $5,000 + $8,400 + $2,800
Cost of Goods available for Sale = $21,000
Units available for Sale = Beginning Inventory + Units Purchased
Units Purchased = 500 + 700 + 200 = 1,400 Units
Units available for Sale = 600 + 1,400
Units available for Sale = 2,000 Units
Weighted Average Cost per Unit = 21,000 / 2,000
Weighted Average Cost per Unit = $10.50
Ending Inventory Units = 800 Units
Cost of Ending Inventory = 800 * $10.50
Cost of Ending Inventory = $8,400
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