18 A 3) A company had the following purchases and sales during its first year of
ID: 2523798 • Letter: 1
Question
18 A 3) A company had the following purchases and sales during its first year of operations: -22 Purchases 10 units at S120 20 units at $125 5 units units at $130 12 units at $135 10 units at $140 units 13 units September: ovember On December 31, there were 26 units remaining in ending inventory. Using the Perpetual FIFO inventory valuation method, what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.) A) $3.670. B) S3,540. C) $5,400. D) $5,130 E) S3,270. 4) A company had the following purchases and sales during its first year of operations: Sales 6 units 0 units at $120 20 units at $125 5 units at $130 12 units at $135 cbruary: units units 13 units ovember 10 units at $140 On December 31, there were 26 units remaining in ending inventory. Using the Perpetual LIFO inventory valuation method, what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.) A) $8.670. B) $5,400. C) $3,470. D) $5,130. E) S5,305. 5) A company had the following purchases and sales during its first month of operations uary1 Purchased 10 units at $4.00 per unit anuary 9 Sold 6 units at $12.00 per unit January 17 Purchased 8 units at $5.50 per unit January 27 Sold 7 units at $12.00 per unit Using the Perpetual weighted average method, what is the value of cost of goods sold? (Round weighted average costs per unit to 2 decimal places.)Explanation / Answer
3. Using FIFO method, means first in first out i.e. sales will be made from the old inventory first then from the new one.
In the above question, answer is Option D 5130
Total units purchased = 67 units at different prices ( 10+20+15+12+10)
Total units sold = 41 units ( 6+5+9+8+13)
Total Cost of Goods sold = 720+605+1125+1000+1680=5130
4.
Using LIFO method, means last in first out i.e. sales will be made from the new inventory first then from the old one.
In the above question, answer is Option B 5400
Total cost of goods sold = 720+625+1170+1080+1805 =5400
5.
Actual purchase cost for the month of Jan = 10* 4 + 8* 5.5 = 84 for 18 units = Weighted average rate = 84/18= 4.67
Actual sales for the month of Jan = 6 units + 7 units = 13 units
So cost of goods sold will be = 13* 4.67 = 60.71
Months Purchase Sales FIFO for Cost of goods sold Jan 10*120 6 6*120 ( balance 4 left ) =720 Feb 20*125 5 4*120+1*125 (balance 19 left)=605 May 15*130 9 9*125 ( balance 10 left) = 1125 Sep 12*135 8 8*125 ( balance 2 left) = 1000 Nov 10*140 13 2*125 (feb stock exhausted)+ 11*130 (purchased in may)= 1680Related Questions
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