accounting week 3 assignment

Topics: Depreciation, Inventory, 1981 Pages: 17 (2128 words) Published: February 1, 2015
Inventory
1. Specific identification method. Boston Galleries uses the specific identification method for inventory valuation. Inventory information for several oil paintings follows. Painting

Cost
1/2 Beginning inventory
Woods
$21,000
4/19 Purchase
Sunset
21,800
6/7 Purchase
Earth
31,200
12/16 Purchase
Moon
4,000
Woods and Moon were sold during the year for a total of $35,000. Determine the firm’s a. Cost of goods sold.
b. Gross profit.
c. Ending inventory.
Date
Beginning Inventory
Purchases
Sales
Cost of Goods Sold
Remaining Inventory Balance
Jan 2
$21,000

$21,000
April 19

$21,800

Woods $21,000
Sunset $21,800
$42,800
June 7

$31,200

Woods $21,000
Sunset $21,800
Earth $31,200
$74,000
Dec 16

$4,000

Woods $21,000
Sunset $21,800
Earth $31,200
Moon $4,000
$78,000
20XX

Woods $21,000
$78,000
-$21,000
$57,000
20Xx

Moon $4,000
$57,000
$4,000
$53,000

Jan 2
Beginning Inventory
$21,000

Purchased painting Woods

$21,000

Paid cash

April 19
Inventory
$21,800

Purchased sunset painting

$21,800

Paid cash

June 7
Inventory
$31,200

Purchased painting Woods

$31,200

Paid cash

Dec 16
Inventory
$4,000

Purchased painting Moon

$4,000

Paid cash

20XX
Accounts Receivable
$35,000

Sales

$35,000

Sold Inventory Cash

20XX
Cost of goods sold
$25,000

Inventory

$25,000

Record the cost of goods sold

Sales
$35,000
Cost of goods sold.
$25,000
Gross profit
$10,000
Ending inventory
$53,000

2. Inventory valuation methods: basic computations. The January beginning inven­tory of the White Company consisted of 300 units costing $40 each. During the first quarter, the company purchased two batches of goods: 700 Units at $44 on February 21 and 800 units at $50 on March 28. Sales during the first quarter were 1,400 units at $75 per unit. The White Company uses a periodic inventory system. Using the White Company data, fill in the following chart to compare the results obtained under the FIFO, LIFO, and weighted-average inventory methods. FIFO Method

Date
Beginning Inventory
Purchases
Sales
Cost of Goods Sold
Remaining Inventory Balance
Jan 1
300@$40.00
300@$40.00=
$12,000.00

300@$40.00=$12,000.00
Feb 21

700@$44.00=
$30,800.00

300@$40.00=$12,000.00
700@$44.00=$30,800.00
$42,000.00

March 28

800@$50.00=
$40,000.00

300@$40.00=$12,000.00
700@$44.00=$30,800.00
800@$50.00=$40,000.00
$82,800.00

March 31

1400@$75.00=
$105,000.00
300@$40.00=$12,000.00
700@$44.00=$30,800.00
400@$50.00=$20,000.00
400@$50.00=$20,000.00

LIFO Method
Date
Beginning Inventory
Purchases
Sales
Cost of Goods Sold
Remaining Inventory Balance
Jan 1
300@$40.00
300@$40.00=
$12,000.00

300@$40.00=$12,000.00
Feb 21

700@$44.00=
$30,800.00

300@$40.00=$12,000.00
700@$44.00=$30,800.00
$42,000.00
March 28

800@$50.00=
$40,000.00

300@$40.00=$12,000.00
700@$44.00=$30,800.00
800@$50.00=$40,000.00
$82,800.00

March 31

1400@$75.00=
$105,000.00
800@$50.00=$40,000.00
600@$44.00=$26,400.00
$66,400.00

300@$40.00=$12,000.00
100@$44.00=$4,400.00
$16,400.00

Weighted Average Method
Date
Beginning Inventory
Purchases
Sales
Cost of Goods Sold
Remaining Inventory Balance
Jan 1
300@$40.00
300@$40.00=
$12,000.00

300@$40.00=$12,000.00
Feb 21

700@$44.00=
$30,800.00

300@$40.00=$12,000.00...
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