6-1 1. BE.06-01.ALGO (Algorithmic) Cost Flow Methods The following three identic

Question

6-1

1. BE.06-01.ALGO (Algorithmic) Cost Flow Methods The following three identical units of Item PX2T are purchased during April April 2 April 15 April 20 Total Average cost per unit Item Beta Units Cost $111 112 113 336 Purchase Purchase Purchase $112 ($3363 units) Assume that one unit is sold on April 27 for $160. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method. Gross Profit Ending Inventory a. First-in, first-out (FIFO) $ b. Last-in, first-out (LIFO) $ c. Weighted average cost$ 2. BE.06-06.ALGO (Algorithmic) Lower-of-Cost-or-Market Methood On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item, as shown in Exhibit 9. Market Value per Unit Item Inventory Quantity Cost per Unit (Net Realizable Value) FW1 SAW9 103 216 $55 29 $60 27 3. BE.06-07.ALGO (Algorithmic) Effect of Inventory Errors During the taking of its physical inventory on December 31, 20Y3, Sellers Company incorrectly counted its inventory as290,420 instead of the correct amount of $313,655. Indicate the effect of the misstatement on Sellers's December 31, 20Y3, balance sheet or income statement for the year ended December 31, 20Y3. For each, select if the amount is overstated or understated. Then, input the over or under amount, entered as a positive value. Cost of goods sold Current assets Gross profit Inventory Net income Stockholders' equity Total assets

Explanation / Answer

1- Computation of gross profit and Inventory at the end of April 30

Invetory at the end of Apr-30 (e)

Gross Profit (d+e) -(a+b+c)

2- Valuation of Inventory at lower of cost or Net realisable value

3- Effects of misstatement of inventory of $23,235(3,13,655-2,90,420)

S.No Cost Method Apr-2 (a) Apr-15 (b) Apr-20 (c) Apr-27 (d)

Invetory at the end of Apr-30 (e)

Gross Profit (d+e) -(a+b+c)

1 First in first out(FIFO) $111(1*111) $112(1*112) $113(1*113) $160(1*160) $225(112+113) $49 2 Last in first out(LIFO) $111(1*111) $112(1*112) $113(1*113) $160(1*160) $223(111+112) $47 3 Weighted average cost $111(1*111) $112(1*112) $113(1*113) $160(1*160) $224(2*112) $48

Related Questions

Navigate

• Browse (All)
• Browse 6
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.