Thorin Corp. began operations in 2017. It is a merchandiser of a single item Pro
ID: 2338651 • Letter: T
Question
Thorin Corp. began operations in 2017. It is a merchandiser of a single item Product Q and uses the Periodic Inventory method. The following relates to purchases of Product Q during 2017: Date Units 400 300 600 300 300 100 2,000 Cost Per Unit $12 $20 $24 $28 $32 $36 Total Cost $4,800 $6,000 $14,400 $8,400 $9,600 $3,600 $46,8000 1/02/17 6/25/17 10/16/17 12/16/17 Goods available for sale At 12/31/17, a physical inventory indicted 420 units of Product Q on hand. Assuming the LIFO method, cost of goods sold should be reported in the 12/31/17 income statement at: $33,040 $36,972 $41,200 $41,760Explanation / Answer
Correct Answer---$33,040.
Calculations
Units
Cost per unit
value
Purchases
2-Jan
400
$ 12.00
$ 4,800.00
16-Jan
300
$ 20.00
$ 6,000.00
18-Mar
600
$ 24.00
$ 14,400.00
25-Jun
300
$ 28.00
$ 8,400.00
16-Oct
300
$ 32.00
$ 9,600.00
16-Dec
100
$ 36.00
$ 3,600.00
2000
$ 46,800.00
FIFO
Total Units Avalable for sale
2000
Units Sold
1580
Closing Stock in Units
420
Valuation
Closing stock
100 units
@
$ 36.00
$ 3,600.00
300 units
@
$ 32.00
$ 9,600.00
20 units
@
$ 28.00
$ 560.00
Value Of Closing Stock
$ 13,760.00
Cost of Goods sold
(46800-13760)
$ 33,040.00
Units purchased last will be in the Ending finished inventory.
Units
Cost per unit
value
Purchases
2-Jan
400
$ 12.00
$ 4,800.00
16-Jan
300
$ 20.00
$ 6,000.00
18-Mar
600
$ 24.00
$ 14,400.00
25-Jun
300
$ 28.00
$ 8,400.00
16-Oct
300
$ 32.00
$ 9,600.00
16-Dec
100
$ 36.00
$ 3,600.00
2000
$ 46,800.00
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