At the end of January 2014, the records of Donner Company showed the following f

Question

At the end of January 2014, the records of Donner Company showed the following for a particular item that sold at $16.00 per unit: Transactions Units Amount 500 $2,650 640 4,672 Inventory, January 1, 2014 Purchase, January 12 Purchase, January 26 Sale Sale 110 1,023 (390) (200) value: 3.75 points Required 1a. Compute Cost of Goods Sold under each method of inventory: average cost, FIFO, LIFO, and specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. (Round unit price to 2 decimal places. Input all amounts as positive values.) Average Cost Cost of Good Available for Sale Cost of Goods Sold Cost of Goods UnitAvailable for Sale Cost of Goods | # of Units Sold Cost per Unit Cost per # of Units Sold Beginning inventory Purchases January 12 January 26 Total

Explanation / Answer

3527

1b.

5. 2a - FIFO

5. 2b - FIFO

6. 3. - LIFO (Since low income therefore low tax expense)

7. 4. - Accordind to me FIFO

1a. Transactions Units Amount Inventory, Jan 1, 2014 500 2650 Purchase, Jan 12 640 4672 Purchase, Jan 26 110 1023 Sale -390 -6240 Sale -200 -3200 Average cost Cost of goods available for sale Cost of goods sold No of units Cost per unit Cost of goods available for sale No of units Cost per unit Cost of goods sold Beginning Inventory 500 5.3 2650 590 6.676 3938.84 Purchases: Jan-12 640 7.3 4672 Jan-26 110 9.3 1023 Total 1250 6.676 8345 590 6.676 3938.84 FIFO Cost of goods available for sale Cost of goods sold No of units Cost per unit Cost of goods available for sale No of units Cost per unit Cost of goods sold Beginning Inventory 500 5.3 2650 390 5.3 2067 Purchases: 110 5.3 583 Jan-12 640 7.3 4672 90 7.3 657 Jan-26 110 9.3 1023 Total 1250 6.676 8345 590 5.605085 3307 LIFO Cost of goods available for sale Cost of goods sold No of units Cost per unit Cost of goods available for sale No of units Cost per unit Cost of goods sold Beginning Inventory 500 5.3 2650 110 9.3 1023 Purchases: 280 7.3 2044 Jan-12 640 7.3 4672 200 7.3 1460 Jan-26 110 9.3 1023 Total 1250 6.676 8345 590 7.672881 4527 Specific Identification Cost of goods available for sale Cost of goods sold No of units Cost per unit Cost of goods available for sale No of units Cost per unit Cost of goods sold Beginning Inventory 500 5.3 2650 390 5.3 2067 Purchases: 200 7.3 1460 Jan-12 640 7.3 4672 Jan-26 110 9.3 1023 Total 1250 6.676 8345 590 5.977966

3527

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