Redster Company is a manufacturing firm. Presented below is information concerni
ID: 2466348 • Letter: R
Question
Redster Company is a manufacturing firm. Presented below is information concerning one of its products, called Ander.
Using an Excel spreadsheet, compute the cost of goods sold under the following situations:
Date
Transaction
Quantity
Price/Cost
1/1
Beginning inventory
2,900
$10
2/12
Purchase
3,300
$15
3/2
Sale
2,400
$28
4/18
Purchase
4,500
$18
5/31
Sale
3,800
$30
Periodic system, FIFO cost flow
Perpetual system, FIFO cost flow
Periodic system, LIFO cost flow
Perpetual system, LIFO cost flow
Periodic system, weighted-average cost flow
Perpetual system, moving-average cost flow
Date
Transaction
Quantity
Price/Cost
1/1
Beginning inventory
2,900
$10
2/12
Purchase
3,300
$15
3/2
Sale
2,400
$28
4/18
Purchase
4,500
$18
5/31
Sale
3,800
$30
Explanation / Answer
1
Calculation of cost of goods sold under the Periodic system, FIFO cost flow
Total Units sold = 2400+3800 = 6200
Date
Transaction
Quantity
Price/Cost
Amount
A
B
A*B
1./1
Beginning inventory
2900
$ 10.00
$ 29,000.00
2./12
Purchase
3300
$ 15.00
$ 49,500.00
Cost of Goods sold
6200
$ 78,500.00
2
Calculation of cost of goods sold under the Perpetual system, FIFO cost flow
Date
Purchase
Cost of Goods sold
Inventory
Quantity
Price
Amount
Quantity
Price
Amount
Quantity
Price
Amount
1./1
2900
$10.00
$29,000.00
2./12
3300
$ 15.00
$49,500.00
2900
$10.00
$29,000.00
3300
$15.00
$49,500.00
3./2
2400
$10.00
$ 24,000.00
500
$10.00
$ 5,000.00
3300
$15.00
$49,500.00
4./18
4500
$ 18.00
$81,000.00
500
$10.00
$ 5,000.00
3300
$15.00
$49,500.00
4500
$18.00
$81,000.00
5./31
500
$10.00
$ 5,000.00
3300
$15.00
$49,500.00
3300
$15.00
$ 49,500.00
4500
$18.00
$81,000.00
Cost of Goods sold
6200
$ 78,500.00
3
Calculation of cost of goods sold under the Periodic system, LIFO cost flow
Date
Transaction
Quantity
Price/Cost
Amount
A
B
A*B
4./18
Purchase
4500
$ 18.00
$ 81,000.00
2./12
Purchase
1700
$ 15.00
$ 25,500.00
(6200-4500)
Cost of Goods sold
6200
$106,500.00
4
Calculation of cost of goods sold under the Perpetual system, LIFO cost flow
Date
Purchase
Cost of Goods sold
Inventory
Quantity
Price
Amount
Quantity
Price
Amount
Quantity
Price
Amount
1./1
2900
$10.00
$29,000.00
2./12
3300
$ 15.00
$49,500.00
2900
$10.00
$29,000.00
3300
$15.00
$49,500.00
3./2
2400
$15.00
$ 36,000.00
2900
$10.00
$29,000.00
900
$15.00
$13,500.00
4./18
4500
$ 18.00
$81,000.00
2900
10
29000
900
15
13500
4500
18
81000
5./31
3800
$18.00
$ 68,400.00
2900
10
29000
900
15
13500
700
18
12600
Cost of Goods sold
6200
$104,400.00
1
Calculation of cost of goods sold under the Periodic system, FIFO cost flow
Total Units sold = 2400+3800 = 6200
Date
Transaction
Quantity
Price/Cost
Amount
A
B
A*B
1./1
Beginning inventory
2900
$ 10.00
$ 29,000.00
2./12
Purchase
3300
$ 15.00
$ 49,500.00
Cost of Goods sold
6200
$ 78,500.00
2
Calculation of cost of goods sold under the Perpetual system, FIFO cost flow
Date
Purchase
Cost of Goods sold
Inventory
Quantity
Price
Amount
Quantity
Price
Amount
Quantity
Price
Amount
1./1
2900
$10.00
$29,000.00
2./12
3300
$ 15.00
$49,500.00
2900
$10.00
$29,000.00
3300
$15.00
$49,500.00
3./2
2400
$10.00
$ 24,000.00
500
$10.00
$ 5,000.00
3300
$15.00
$49,500.00
4./18
4500
$ 18.00
$81,000.00
500
$10.00
$ 5,000.00
3300
$15.00
$49,500.00
4500
$18.00
$81,000.00
5./31
500
$10.00
$ 5,000.00
3300
$15.00
$49,500.00
3300
$15.00
$ 49,500.00
4500
$18.00
$81,000.00
Cost of Goods sold
6200
$ 78,500.00
3
Calculation of cost of goods sold under the Periodic system, LIFO cost flow
Date
Transaction
Quantity
Price/Cost
Amount
A
B
A*B
4./18
Purchase
4500
$ 18.00
$ 81,000.00
2./12
Purchase
1700
$ 15.00
$ 25,500.00
(6200-4500)
Cost of Goods sold
6200
$106,500.00
4
Calculation of cost of goods sold under the Perpetual system, LIFO cost flow
Date
Purchase
Cost of Goods sold
Inventory
Quantity
Price
Amount
Quantity
Price
Amount
Quantity
Price
Amount
1./1
2900
$10.00
$29,000.00
2./12
3300
$ 15.00
$49,500.00
2900
$10.00
$29,000.00
3300
$15.00
$49,500.00
3./2
2400
$15.00
$ 36,000.00
2900
$10.00
$29,000.00
900
$15.00
$13,500.00
4./18
4500
$ 18.00
$81,000.00
2900
10
29000
900
15
13500
4500
18
81000
5./31
3800
$18.00
$ 68,400.00
2900
10
29000
900
15
13500
700
18
12600
Cost of Goods sold
6200
$104,400.00
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