Financial Accounting (ACCT 1) Spring 2018 Second Exam 3/12/2018 Use the followin

Question

Financial Accounting (ACCT 1) Spring 2018 Second Exam 3/12/2018 Use the following information to answer questions 19- 20 June 1 Inventory .0 units @$30 Purchased..u0 units @ $28 Salesneree 14 21 30 Sales 40 units Purchased.x.30 units@ $29 28 units 19. Assuming that a perpetual inventory system is used, what is ending inventory on a FIFO basis? A $1,934 $ 918 C s 926 D $1,924 20. Assuming that a perpetual inventory system is used, what is ending inventory on a LIFO basis? A $1,934 $ 918 $926 D $1,924 21. If the estimated rate of gross profit is 30%, what is the estimated cost of the merchandise inventory on June 30, using the following data? June 1 June 1-30 June 1-30 Merchandise Inventory $75,000 Net purchases Net sales 150,000 135,000 A $130,500 $135,000 C $150,000 D $ 94,500 22. On the basis of the following data, what is the estimated cost of the merchandise inventory on October 31 by the retail method? Cost Retail Oet 1 Oct 1-31 Oct 1-31 Merchandise Inventory $225,000 Net purchases Net Sales $324,500 475,500 600,000 335,000 A $168,000 $225,000 $420,000 D $140,000

Explanation / Answer

Note for Q19 and Q20. STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ 1-Jun 10 30 300 5-Jun 60 28 1680 10 30 300 60 28 1680 15-Jun 10 30 300 30 28 840 30 28 840 21-Jun 30 29 870 30 28 840 30 29 870 30-Jun 28 28 784 2 28 56 30 29 870 TOTAL 90 2550 68 1924 32 926 STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL LIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ 1-Jun 10 30 300 5-Jun 60 28 1680 10 30 300 60 28 1680 15-Jun 40 28 1120 10 30 300 20 28 560 21-Jun 30 29 870 10 30 300 20 28 560 30 29 870 30-Jun 28 29 812 10 30 300 20 28 560 2 29 58 TOTAL 90 2550 68 1932 32 918 Q19. Answer is C. $ 926 Q20. Answer is B. $918 Q21. Answer is A. $ 130,500 Explanation: Beginning inventory 75000 Add: Purchases 150000 Less: COGS (135000*70%) 94500 Ending inventory 130500 Q22. Answer is D. $ 140,000 Explanation: Cost Retail Beginning Inventory 225000 324500 Add: Purchase 335000 475500 Total 560000 800,000 Percentage of cost to Rretail price 70% Less: Sales 420000 600,000 Ending inventory 140,000 200,000

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