Assume, instead, that LuCo\'s December 31, 20X4 ending inventory is 300 units; i
ID: 2517515 • Letter: A
Question
Assume, instead, that LuCo's December 31, 20X4 ending inventory is 300 units; its December 31, 20X5 ending inventory is 800 units; and its December 31, 20x6 ending inventory is 600 units (which is lower than its 20X6 beginning inventory). What is LuCo's December 31, 20X6 ending inventory? 33. a. $6,600 b. $4,800 c. $4,400 d. $3,600 When WeCo begins operations in 20X4, it chooses the periodic method and LIFO costing. Within a given year's LIFO layer, it uses weighted average costing. During 20X4, WeCo makes the following merchandise purchases 34. May 30 June 24 October 11 December 4 1,400 400 $4 800@ $5 900 $7 $6 If the December 31, 20X4 ending inventory is 1,000 units, and the De- cember 31, 20X5 ending inventory is 300 units, what is the 20X5 ending inventory? a. $1,200 b. $1,380 c. $1,740 d. $1,800 Use the following information for problems #35-40. HuCo begins operations in 20X4, uses the periodic method and makes the following merchandise purchases 20X4 April September Total units 900 1,300 Unit cost Total cost $5,400 9,100 7 20X5 March November 1,100 500 $8,800 5,000 10Explanation / Answer
Question have been answered from Q30 - Q33 as the information is available for the same.
Information to be kept in mind while solving these questions
1. LuCo began its operations in 20X4
2. Company is following LIFO method which mean Last in First Out - So the goods purchased later will be sold first.
Answer to Q30 - c $2,200
Total Units purchased in 20X4 by the company = 300 + 500 + 200 + 400 = 1400 units
Units Sold in the current year 900
therfore the closing units are 1400 - 900 = 500(This 500 units will be the one purchased at the begining of the year)
Therefore the value of closing stock is March units 300X$4 + July units 200X$5 = $2200 (Total units being 500 using LIFO method)
Answer to Q31 - a $3,200
Solution The LuCo's has 200 units of 20X4 inventory which would be of March purchases
Therefore the cost will be 200X$4 = $800
In 20X5 the inventory units were 500 in total (200 units of 20X4 and 300 units of purchases made in 20X5)
therefore using LIFO method the amount will be at the cost of purchases made in March @ $8
Cost = 300X$9 = $2400
Therefore the total cost = $800 + $2400 = $3200
Answer to Q32 - d $6300
The inventory at the end of 20X6 is 700 units (200 units of 20X5 and 500 units of purchases made in 20X6)
Please note company is using LIFO method so even if sales takes place will be from New purchases and not old purchases.
Cost of 200 units of 20X5 will be from opening inventory of 20X5 and closing of 20X4. 200 units will be purchases made in the 20X4 at the begining @ $4 p.u. therefore its cost is 200X$4 = $800
Now remaining 500 units will be of purchases made in 20X6 at the begining in March @ $11
therefore the cost will be 500X $11 = $5500
Total cost $5500+$800 = $6300.
Answer to Q33 - d $3600
The closing inventory is 600 units for 20X6
Opening Inventory for 20X6 was 800 units which mean closing inventroy of 20X5 was 800 units.
800 units consisted of 300 units of closing unit of 20X4
300 units will be purchased in March appearing in closing units of March 20X4
Cost of 300 units = 300X$4 = $1200
Remaining 300 units must have been purchased in 20X5 appearning in closing inventory of 20X5 as well as 20X6 because of LIFO
Therefore the cost will be as per the purchases made in March 20X5 @ $8 = 300X $8 = $2400
Total cost = $1200 + $2400 = $3600
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