50) Inventory data for Army & Navy Wear Co. are provided below. Sales for the month were 220 units sold for $12 each. The company maintains a periodic inventory system.
Date
|
|
Number of Units
|
Unit Cost
|
Total Cost
|
Jan. 01
|
Beginning inventory
|
50
|
$5.00
|
$ 250
|
Jan. 15
|
Purchases
|
70
|
$6.00
|
$ 420
|
Jan. 20
|
Purchases
|
80
|
$7.00
|
$ 560
|
Jan. 27
|
Purchases
|
100
|
$7.50
|
$ 750
|
Totals
|
|
300
|
|
$1,980
|
Required:
1. Determine the cost of goods sold and ending inventory for the month assuming the company uses the FIFO cost flow method.
2. Determine the cost of goods sold and ending inventory for the month assuming the company uses the LIFO cost flow method.
3. Determine the cost of goods sold and ending inventory for the month assuming the company uses the weighted average method.
4. Which method would you recommend that the company use if its objective is to minimize its income tax liability?
51) Inventory data for Army & Navy Wear Co. are provided below. Sales for the quarter were 220 units sold for $12 each.
Date
|
|
Number of Units
|
Unit Cost
|
Total Cost
|
Jan. 01
|
Beginning inventory
|
150
|
$5.00
|
$ 750
|
Jan. 15
|
Purchase
|
70
|
$6.00
|
$ 420
|
Feb. 01
|
Sale
|
100
|
|
|
Feb. 20
|
Purchase
|
180
|
$7.00
|
$1,260
|
March 05
|
Sale
|
120
|
|
|
March 19
|
Purchase
|
50
|
$7.50
|
$ 375
|
Required:
1. Calculate the cost of goods sold for the quarter assuming the company uses a FIFO perpetual inventory system.
2. Calculate the cost of goods sold for the quarter assuming the company uses a LIFO perpetual inventory system.
3. Which system (perpetual or periodic) do you think is increasing in use because of computer technology?
52) The Quiet Gravestone Company has only one product: a large, 3-foot gravestone. Data for inventory during February of the current year are provided below. Assume the company uses a perpetual inventory system and the FIFO cost flow method.
Date
|
|
Number of Units
|
Unit Cost
|
Total Cost
|
Feb 01
|
Beginning inventory
|
5
|
$40.00
|
$200
|
Feb 04
|
Purchase
|
10
|
$42.00
|
$420
|
Feb 10
|
Purchase
|
12
|
$44.00
|
$528
|
Feb 18
|
Purchase
|
8
|
$45.00
|
$360
|
Feb 25
|
Purchase
|
14
|
$46.00
|
$644
|
Sales for the month were:
February 7: seven sold at $1,000
February 15: five sold at $1,050
February 20: ten sold at $1,100
Required:
1. What is the cost of goods sold for the February 7 sale?
2. What is the cost of goods sold for the February 15 sale?
3. What is the cost of goods sold for the February 20 sale?
4. If the company used a periodic inventory system and the FIFO cost flow method, what would cost of goods sold be for the month?
53) The Cemetery Gravestone Company has only one product: a large, 3-foot gravestone. Data for inventory during February of the current year are provided below. Assume the company uses a
PERPETUAL
inventory system and the LIFO cost flow method.
Date
|
|
Number of Units
|
Unit Cost
|
Total Cost
|
Feb 01
|
Beginning inventory
|
5
|
$40.00
|
$200
|
Feb 04
|
Purchase
|
10
|
$42.00
|
$420
|
Feb 10
|
Purchase
|
12
|
$44.00
|
$528
|
Feb 18
|
Purchase
|
8
|
$45.00
|
$360
|
Feb 25
|
Purchase
|
14
|
$46.00
|
$644
|
Sales for the month were:
February 7: seven sold at $1,000
February 15: five sold at $1,050
February 20: ten sold at $1,100
Required:
1. What is the cost of goods sold for the February 7 sale?
2. What is the cost of goods sold for the February 15 sale?
3. What is the cost of goods sold for the February 20 sale?
4. If the company used a
PERIODIC
inventory system and the LIFO cost flow method, what would the cost of goods sold be for the month?