# Assignment 202 20Dr

Pages: 4 (531 words) Published: March 10, 2015
Accounting II
Assignment 2 Dr. Medhat El Guindy

FMI

Copy 2015

Dr. Heba Wahba
CPA — CIA — CMA
01114364363
1

Dr. Heba Wahba

EXERCISE 6-8
(a)

Cost of Goods
Available for Sale
\$5,500

÷

Total Units
Available for Sale
900

Ending inventory (100 X \$6.11)
Cost of goods sold (800 X \$6.11)

Weighted Average
Unit Cost
\$6.11

=

\$ 611
4,889

(b) Ending inventory is lower than FIFO (\$700) and higher than LIFO (\$500). In contrast, cost of goods sold is higher than FIFO (\$4,800) and lower than LIFO (\$5,000).
(c) The average-cost method uses a weighted-average unit cost, not a simple average of unit costs.

EXERCISE 6-9
Cost
Cameras
Minolta
Canon
Total
Light meters
Vivitar
Kodak
Total
Total inventory

\$

Market

850
900
1,750

1,500
1,680
3,180
\$4,930

\$

780
912
1,692

1,380
1,890
3,270
\$4,962

Lower
-of-Cost
-or-Market:
\$

780
900

1,380
1,680
\$4,740

EXERCISE 6-14
(a)
Inventory Turnover

Days in Inventory
(b)

Alpha Company

Omega Company

\$190,000
(\$45,000 + \$55,000)/2
= 3.80

\$292,000
(\$71,000 +
\$69,000)/2
= 4.17

365/3.80 = 96 days

365/4.17 = 88 days

Omega Company is moving its inventory more quickly, since its inventory turnover is higher, and its days in inventory is lower.

2

Dr. Heba Wahba

EXERCISE 6-16
(a)

The cost of goods available for sale is:
June 1 Inventory
June 12 Purchase
June 23 Purchase
Total cost of goods available

200 @ \$5
400 @ \$6
300 @ \$7
for sale

\$1,000
2,400
2,100
\$5,500

FIFO
Date
June 1
June 12

Purchases
(400 @ \$6)
\$2,400

June 15

June 23

Cost of Goods Sold

(200 @ \$5)
(240 @ \$6)

\$1,000
1,440

(160 @ \$6)
(200 @ \$7)

960
1,400
\$4,800

(300 @ \$7) \$2,100

June 27

Balance
(200 @ \$5)
\$1,000
(200 @ \$5)
} \$3,400
(400 @ \$6)
(160 @ \$6)
\$ 960
(160 @ \$6)
\$3,060
(300 @ \$7) }

(100 @ \$7)

\$

700

Ending inventory: \$700. Cost of goods sold:...