At the end of January 2014, the records of Donner Company showed the following f
ID: 2402583 • Letter: A
Question
At the end of January 2014, the records of Donner Company showed the following for a particular item that sold at $17.40 per unit: Transactions Units Amount 620 $3,255 600 150 1,350 (480) (200) Inventory, January 1, 2014 Purchase, January 12 4,200 Purchase, January 26 Sale Sale value: 4.37 points Required 1a. Compute Cost of Goods Sold under each method of inventory: average cost, FIFO, LIFO, and specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. (Round unit price to 2 decimal places. Input all amounts as positive values.) age Cost Cost of Good Available for Sale Cost of Goods Sold Cost of Goods Unit Available Sold for Sale Cost of Goods Sold # of Units | Cost per | # of Units Cost per Unit Beginning inventory Purchases January 12 January 26 Total FIFO Cost of Goods Available for Sale Cost of Goods Sold Cost of Goods Available for Sale Cost of Goods Sold Cost per Unit Cost per Unit # of Units | | # of Units iSold Beginning inventory Purchases January 12 January 26 Total LIFO Cost of Goods Available for Sale Cost of Goods Sold Cost of Goods Available for Sale Cost of Goods Sold Cost per Unit | # of Units Sold Cost per Unit # of Units | Beginning inventory January 12 January 26 TotalExplanation / Answer
Solution:
Part 1a – Cost of Goods Sold
Average Cost
Cost of Goods Available for Sale
Cost of Goods Sold
# of units
Cost per unit
Cost of Goods Available for sale
# of units
Cost per unit
Cost of goods sold
Beginning Inventory
620
$3.255
$2,018.10
Purchases:
Jan 12
600
$4.200
$2,520.00
Jan 26
150
$1.350
$202.50
Total
1370
$3.460
$4,740.60
$680.000
$3
$2,352.80
FIFO
Cost of Goods Available for Sale
Cost of Goods Sold
# of units
Cost per unit
Cost of Goods Available for sale
# of units
Cost per unit
Cost of goods sold
Beginning Inventory
620
$3.255
$2,018.10
620
$3.255
$2,018.10
Purchases:
Jan 12
600
$4.200
$2,520.00
60
$4.200
$252.00
Jan 26
150
$1.350
$202.50
Total
1370
$4,740.60
680
$2,270.10
LIFO
Cost of Goods Available for Sale
Cost of Goods Sold
# of units
Cost per unit
Cost of Goods Available for sale
# of units
Cost per unit
Cost of goods sold
Beginning Inventory
620
$3.255
$2,018.10
Purchases:
Jan 12
600
$4.200
$2,520.00
530
$4.20000
$2,226.00
Jan 26
150
$1.350
$202.50
150
$1.35000
$202.50
Total
1370
$4,740.60
680
$2,428.50
Specific Identification
Cost of Goods Available for Sale
Cost of Goods Sold
# of units
Cost per unit
Cost of Goods Available for sale
# of units
Cost per unit
Cost of goods sold
Beginning Inventory
620
$3.255
$2,018.10
620
$3.255
$2,018.10
Purchases:
Jan 12
600
$4.200
$2,520.00
60
$4.200
$252.00
Jan 26
150
$1.350
$202.50
Total
1370
$4,740.60
680
$2,270.10
1b – Partial Income Statement
Partial Income Statement
For the Month Ended January 31, 2014
(a)
(b)
( c)
(d)
Avg Cost
FIFO
LIFO
Specific Identification
Sales Revenue (680 Units *$17.4)
$11,832.00
$11,832.00
$11,832.00
$11,832.00
Cost of Goods Sold (refer Part 1a)
$2,352.80
$2,270.10
$2,428.50
$2,270.10
Gross Profit
$9,479.20
$9,561.90
$9,403.50
$9,561.90
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ALTERNATIVELY...
Assumed the given amount is total amount of the inventory and units purchased..
Average Cost
Cost of Goods Available for Sale
Cost of Goods Sold
# of units
Cost per unit
Cost of Goods Available for sale
# of units
Cost per unit
Cost of goods sold
Beginning Inventory
620
$5.25
$3,255
Purchases:
Jan 12
600
$7.00
$4,200
Jan 26
150
$9.00
$1,350
Total
1370
$6.43
$8,805
680
$6.43
$4,372.40
FIFO
Cost of Goods Available for Sale
Cost of Goods Sold
# of units
Cost per unit
Cost of Goods Available for sale
# of units
Cost per unit
Cost of goods sold
Beginning Inventory
620
$5.25
$3,255
620
$5.25
$3,255.00
Purchases:
Jan 12
600
$7.00
$4,200
60
$7.00
$420.00
Jan 26
150
$9.00
$1,350
Total
1370
$8,805
680
$3,675
LIFO
Cost of Goods Available for Sale
Cost of Goods Sold
# of units
Cost per unit
Cost of Goods Available for sale
# of units
Cost per unit
Cost of goods sold
Beginning Inventory
620
$5.25
$3,255
Purchases:
Jan 12
600
$7.00
$4,200
530
$7.00
$3,710
Jan 26
150
$9.00
$1,350
150
$9.00
$1,350
Total
1370
$8,805
680
$5,060
Specific Identification
Cost of Goods Available for Sale
Cost of Goods Sold
# of units
Cost per unit
Cost of Goods Available for sale
# of units
Cost per unit
Cost of goods sold
Beginning Inventory
620
$5.25
$3,255
620
$5.25
$3,255
Purchases:
Jan 12
600
$7.00
$4,200
60
$7.00
$420
Jan 26
150
$9.00
$1,350
Total
1370
$8,805
680
$3,675
Partial Income Statement
For the Month Ended January 31, 2014
(a)
(b)
( c)
(d)
Avg Cost
FIFO
LIFO
Specific Identification
Sales Revenue (680 Units *$17.4)
$11,832.00
$11,832.00
$11,832.00
$11,832.00
Cost of Goods Sold (refer Part 1a)
$4,372.40
$3,675.00
$5,060.00
$3,675.00
Gross Profit
$7,459.60
$8,157.00
$6,772.00
$8,157.00
Average Cost
Cost of Goods Available for Sale
Cost of Goods Sold
# of units
Cost per unit
Cost of Goods Available for sale
# of units
Cost per unit
Cost of goods sold
Beginning Inventory
620
$3.255
$2,018.10
Purchases:
Jan 12
600
$4.200
$2,520.00
Jan 26
150
$1.350
$202.50
Total
1370
$3.460
$4,740.60
$680.000
$3
$2,352.80
FIFO
Cost of Goods Available for Sale
Cost of Goods Sold
# of units
Cost per unit
Cost of Goods Available for sale
# of units
Cost per unit
Cost of goods sold
Beginning Inventory
620
$3.255
$2,018.10
620
$3.255
$2,018.10
Purchases:
Jan 12
600
$4.200
$2,520.00
60
$4.200
$252.00
Jan 26
150
$1.350
$202.50
Total
1370
$4,740.60
680
$2,270.10
LIFO
Cost of Goods Available for Sale
Cost of Goods Sold
# of units
Cost per unit
Cost of Goods Available for sale
# of units
Cost per unit
Cost of goods sold
Beginning Inventory
620
$3.255
$2,018.10
Purchases:
Jan 12
600
$4.200
$2,520.00
530
$4.20000
$2,226.00
Jan 26
150
$1.350
$202.50
150
$1.35000
$202.50
Total
1370
$4,740.60
680
$2,428.50
Specific Identification
Cost of Goods Available for Sale
Cost of Goods Sold
# of units
Cost per unit
Cost of Goods Available for sale
# of units
Cost per unit
Cost of goods sold
Beginning Inventory
620
$3.255
$2,018.10
620
$3.255
$2,018.10
Purchases:
Jan 12
600
$4.200
$2,520.00
60
$4.200
$252.00
Jan 26
150
$1.350
$202.50
Total
1370
$4,740.60
680
$2,270.10
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