IThe following information applies to the questions displayed below.] The accoun

Question

IThe following information applies to the questions displayed below.] The accounting records of Brooks Photography, Inc., reflected the following balances as of January 1, 2012: Cash Beginning inventory Common stock Retained earnings $16,600 13,195 (145 units $91) 14,400 15,395 The following five transactions occurred in 2012: 1. First purchase (cash) 2. Second purchase (cash) 3. Sales (all cash) 4. Pald $14,550 cash for operating expenses. 5. Pald cash for Income tax at the rate of 30 percent of Income before taxes. 120 units @ $93 200 units @ $101 295 unlts $200

Explanation / Answer

Units Rate Amount Weighted Cost Opening Inventory 145 $      91 $      13,195 Purchase 1 120 $      93 $      11,160 Purchase 2 200 $    101 $      20,200 Total Units available for sale 465 $      44,555 $          95.82 Sales units 295 $    200 Closing Inventory 170 $ 95.82 $ 16,288.92 COGS 295 $ 95.82 $ 28,266.08 FIFO COGS = (145*91)+(120*93)+(30*101) $                                               27,385 Closing Inventory = (170*101) $                                               17,170 LIFO COGS = (95*93)+(200*101) $                                               29,035 Closing Inventory = (25*93)+(145*91) $                                               15,520 Weighted COGS = (95.82*295) $                                               16,289 Closing Inventory = (95.82*170) $                                               28,266

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