ACC
205 Week 3 E5-16, E6-23, E6-28 Accounting 9th ed.
E5-16 Computing inventory and cost of goods sold
amounts
E5-16 Consider the following incomplete
table of merchandiser's profit data:
|
Sales
|
Sales Discounts
|
Net Sales
|
Cost of Goods Sold
|
Gross Profit
|
|
$ 89,500
|
$ 1,560
|
$ 87,940
|
$ 60,200
|
(a)
|
|
$103,600
|
(b)
|
$ 99,220
|
(c)
|
$ 34,020
|
|
$ 66,200
|
$ 2,000
|
$ 40,500
|
(d)
|
(e)
|
|
(f)
|
$ 2,980
|
(g)
|
$ 75,800
|
$ 36,720
|
Requirement
Calculate the missing table values to complete the table.
E6-23 Comparing cost of goods sold in perpetual system --- FIFO, LIFO, and Average-cost
methods
E6-23Assume that JR Tire Store completed the following perpetual inventory
transactions for a line of tires:
Beginning inventory …………. 16 tires@
$ 65
Purchase……………………………. 10
tires@ $ 78
Sale……………………………………. 12
tires@ $ 90
Requirements:
Compute cost of goods sold and gross profit using FIFO.
Compute cost of goods sold and gross profit using LIFO.
Compute cost of goods sold and gross profit using average-cost. (Round average cost per unit to the nearest cent and all other amounts to the nearest dollar.) Which method results in the largest gross profit and why?
E6-28 Estimating ending inventory by the gross profit method
E6-28 Deluxe Auto Parts holds inventory all over the world. Assume that the records for one auto part show the following:
Beginning inventory…………………….. $ 220,000
Net purchases………………………………. $ 800,000
Net sales………………………………………..$1,100,000
Gross profit rate……………………………. 45%
Suppose this inventory, stored in the United States, was lost in a fire.
Requirement:
Estimate the amount of the loss to Deluxe Auto Parts. Use the
gross profit method.
SOLUTION PREVIEW
Sales – Sales
Discounts = Net Sales = Cost of goods sold + Gross Profit
(a) Gross Profit = Net Sales – Cost of
goods sold
=
$87,940 - $60,200
=
$27,740
(b) Sales Discounts = Sales – Net Sales
=
$103,600 - $99,220
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