Use the following information for questions 4-7. Heisman Inc. uses the periodic
ID: 2408850 • Letter: U
Question
Use the following information for questions 4-7. Heisman Inc. uses the periodic inventory system. June On hand, 50 units a S15.00 eaclh Purchased 115 units @ $15.10 each 750.00 1,736.50 14Purchased 75 units @ $15.20 each Total cost of goods available for sale On hand, 90 units 30 4. IfHeisman uses the FIFO inventory method, the amount assigned to the June 30 inventory would be A. $1,354.00 B. $1,366.50 C. $1,590.42 D. $1,594.00 5. IfHeisman uses the LIFO inventory method, the cost of goods sold for June would be A. S1,354.00 B. $2,200.00 C. $2,272.50 D. $2,296.08 6. If Heisman uses the weighted average cost inventory method, the amount assigned to the June 30th inventory would be A. S1,359.90 B. $1,486.50 C. $1,549.00 D. $1,591.50 7. If the June 30th inventory included 45 units from the June 5th purchase and 45 units from the June 14th purchase, Heisman's cost of goods sold for June under the specific identification method would be A. $2,263.00 B. $2.373.00 C. $2,945.00 D. $3,626.50Explanation / Answer
Answer
FIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
50
$ 15.00
$ 750.00
50
$ 15.00
$ 750.00
0
$ 15.00
$ -
Purchases:
05-Jun
115
$ 15.10
$ 1,736.50
100
$ 15.10
$ 1,510.00
15
$ 15.10
$ 226.50
14-Jun
75
$ 15.20
$ 1,140.00
$ 15.20
$ -
75
$ 15.20
$ 1,140.00
TOTAL
240
$ 3,626.50
150
$ 2,260.00
90
$ 1,366.50 [ANSWER]
---Hence, the correct answer is Option B: $ 1,366.50
LIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
50
$ 15.00
$ 750.00
0
$ 15.00
$ -
50
$ 15.00
$ 750.00
Purchases:
05-Jun
115
$ 15.10
$ 1,736.50
75
$ 15.10
$ 1,132.50
40
$ 15.10
$ 604.00
14-Jun
75
$ 15.20
$ 1,140.00
75
$ 15.20
$ 1,140.00
0
$ 15.20
$ -
$ -
0
$ -
$ -
0
$ -
$ -
$ -
0
$ -
$ -
0
$ -
$ -
TOTAL
240
$ 3,626.50
150
$ 2,272.50 [ANSWER]
90
$ 1,354.00
---Hence, the correct answer is Option C: $ 2,272.50
Average Method
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
50
$ 15.00
$ 750.00
Purchases:
05-Jun
115
$ 15.10
$ 1,736.50
14-Jun
75
$ 15.20
$ 1,140.00
$ -
$ -
TOTAL
240
15.11042
$ 3,626.50
150
15.11
$ 2,266.56
90
$ 15.11
$ 1,359.90 [ANSWER]
---Hence, the correct answer is Option A: $ 1,359.90
Specific Identification
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
50
$ 15.00
$ 750.00
50
$ 15.00
$ 750.00
0
$ 15.00
$ -
Purchases:
05-Jun
115
$ 15.10
$ 1,736.50
70
$ 15.10
$ 1,057.00
45
$ 15.10
$ 679.50
14-Jun
75
$ 15.20
$ 1,140.00
30
$ 15.20
$ 456.00
45
$ 15.20
$ 684.00
$ -
0
$ -
$ -
0
$ -
$ -
$ -
0
$ -
$ -
0
$ -
$ -
TOTAL
240
$ 3,626.50
150
$ 2,263.00 [ANSWER]
90
$ 1,363.50
---Hence, the correct answer is Option A: $2,263.00
FIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
50
$ 15.00
$ 750.00
50
$ 15.00
$ 750.00
0
$ 15.00
$ -
Purchases:
05-Jun
115
$ 15.10
$ 1,736.50
100
$ 15.10
$ 1,510.00
15
$ 15.10
$ 226.50
14-Jun
75
$ 15.20
$ 1,140.00
$ 15.20
$ -
75
$ 15.20
$ 1,140.00
TOTAL
240
$ 3,626.50
150
$ 2,260.00
90
$ 1,366.50 [ANSWER]
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