The Boxwood Company sells blankets for $ 40.00 each. The following was taken fro

Question

The Boxwood Company sells blankets for $ 40.00 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Assuming that the company uses the perpetual inventory system, determine the cost of goods sold for the sale of May 20 using the FIFO inventory cost method.

Select the correct answer.

a) $132.00

b) $176.00

c) $140.00

d) $224.00

If the estimated rate of gross profit is 30%, what is the estimated cost of the inventory on September 30, based on the following data?

Select the correct answer.

a) $153,215.90

b) $92,913.10

c) $48,000.90

d) $39,819.90

The following lots of a particular commodity were available for sale during the year

The firm uses the periodic system, and there are 26 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the FIFO method?

Select the correct answer.

a) $1,482.00

b) $4,018.00

c) $1,326.00

d) $4,044.00

Addison, Inc. uses a perpetual inventory system. Below is information about one inventory item for the month of September. Use this information to answer the question that follow.

If Addison uses FIFO, the cost of the ending inventory on September 30 is

a) $700

b) $650

c) $800

d) $750

Date Product Z Units Cost May 01 Balance 7 $16.00 May 10 Sale 5 May 17 Balance 15 $18.00 May 20 Sale 8 May 23 Sale 2 May 30 Balance 10 $21.00

Explanation / Answer

1) Cost of goods sold under FIFO perpetual system = (2*16+6*18) = 140

so answer is c) $140

2) Ending inventory = Beginning inventory+Purchase-Cost of goods sold

Cost of goods sold = 132733*70% = 92913.10

Ending inventory = 86126+160003-92913.10= 153215.90

so answer is a) $153215.90

3) Ending inventory = (17*57+9*57) = 1482

so answer is a) $1482

4)Ending inventory = (10*30+20*25) = 800

so answer is c) $800

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