Hull Company’s record of transactions concerning part X for the month of April w
ID: 2492844 • Letter: H
Question
Hull Company’s record of transactions concerning part X for the month of April was as follows.
Purchases Sales
April 1 (balance on hand) 100 @ $5.00 April 5 300
4 400 @ 5.10 12 200
11 300 @ 5.30 27 800
18 200 @ 5.35 28 150
26 600 @ 5.60
30 200 @ 5.80
Instructions
(a) Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. Carry unit costs to the nearest cent.
(1) First-in, first-out (FIFO).
(2) Last-in, first-out (LIFO).
(3) Average cost.
(b) If the perpetual inventory record is kept in dollars, and costs are computed at the time of each withdrawal, what amount would be shown as ending inventory in 1, 2, and 3 above? Carry average unit costs to four decimal places.
Explanation / Answer
First In First Out (FIFO) Date Particulars Units Particulars of Units moving in/out Total cost of Purchases Cost of sales Particulars of Balance Cost of Balance Inventory Apr-01 Balance 100 - - - 100 * 5 500.00 Apr-04 Purchases 400 400 units @ 5.10 2,040.00 100*5 + 400*5.10 2,540.00 Apr-05 Sales 300 100 units @ 5 + 200 units @5.10 1,520.00 200 * 5.10 1,020.00 Apr-11 Purchases 300 300 units @ 5.30 1,590.00 200 * 5.10 + 300*5.30 2,610.00 Apr-12 Sales 200 200 units @ 5.10 1,020.00 300*5.30 1,590.00 Apr-18 Purchases 200 200 units @ 5.35 1,070.00 300*5.30 + 200*5.35 2,660.00 Apr-26 Purchases 600 600 units @ 5.60 3,360.00 300*5.30 + 200*5.35 + 600*5.60 6,020.00 Apr-27 Sales 800 300 units @ 5.30 + 200 units @ 5.35+ 300 units @ 5.60 4,340.00 300*5.60 1,680.00 Apr-28 Sales 150 150 units @ 5.60 840.00 150*5.60 840.00 Apr-30 Purchases 200 200 units @ 5.80 1,160.00 150*5.60 + 200*5.80 2,000.00 Last In First Out (LIFO) Date Particulars Units Particulars of Units moving in/out Total cost of Purchases Cost of sales Particulars of Balance Cost of Balance Inventory Apr-01 Balance 100 - - - 100 * 5 500.00 Apr-04 Purchases 400 400 units @ 5.10 2,040.00 100*5 + 400*5.10 2,540.00 Apr-05 Sales 300 300 units @5.10 1,530.00 100*5 + 100*5.10 1,010.00 Apr-11 Purchases 300 300 units @ 5.30 1,590.00 100*5 + 100*5.10 + 300*5.30 2,600.00 Apr-12 Sales 200 200 units @ 5.30 1,060.00 100*5 + 100*5.10 + 100*5.30 1,540.00 Apr-18 Purchases 200 200 units @ 5.35 1,070.00 100*5 + 100*5.10 + 100*5.30 + 200*5.35 2,610.00 Apr-26 Purchases 600 600 units @ 5.60 3,360.00 100*5 + 100*5.10 + 100*5.30 + 200*5.35 + 600*5.60 5,970.00 Apr-27 Sales 800 600 units @ 5.60 + 200 units @ 5.35 4,430.00 100*5 + 100*5.10 + 100*5.30 1,540.00 Apr-28 Sales 150 100 units @ 5.30 + 50 units @ 5.10 785.00 100*5 + 50*5.10 755.00 Apr-30 Purchases 200 200 units @ 5.80 1,160.00 100*5 + 50*5.10 + 200*5.80 1,915.00 Average Cost Date Particulars Units Total cost of Purchases Total Units Total cost = Previous balance +Cost of Purchases Cost of Sales Cost of Balance Inventory= Total Cost- Cost of sales Cost per unit Apr-01 Balance 100 - 100.00 500.00 - 500.00 5.00 Apr-04 Purchases 400 2,040.00 500.00 2,540.00 - 2,540.00 5.08 Apr-05 Sales -300 200.00 2,540.00 300*5.08= 1524 1,016.00 5.08 Apr-11 Purchases 300 1,590.00 500.00 2,606.00 2,606.00 5.21 Apr-12 Sales -200 300.00 2,606.00 300*5.21= 1563.60 1,042.40 3.47 Apr-18 Purchases 200 1,070.00 500.00 2,112.40 - 2,112.40 4.22 Apr-26 Purchases 600 3,360.00 1,100.00 5,472.40 - 5,472.40 4.97 Apr-27 Sales -800 300.00 5,472.40 300*4.97= 1492.47 3,979.93 13.27 Apr-28 Sales -150 150.00 3,979.93 150*13.27= 1989.97 1,989.96 13.27 Apr-30 Purchases 200 1,160.00 350.00 3,149.96 - 3,149.96 9.00
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