At the end of January 2014, the records of Donner Company showed the following f
ID: 2555842 • Letter: A
Question
At the end of January 2014, the records of Donner Company showed the following for a particular item that sold at $18.80 per unit:
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2) Prepare a partial income statement under each method of inventory: (a) average cost, (b) FIFO, (c) LIFO, and (d) 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.
I request you to please show all work, I am stuck on this question.
Explanation / Answer
average cost
Cost of goods available for sale
Cost of goods sold
No. of units
Cost per unit
Cost of goods available for sale
No. of units sold
Cost per uni
Cost of goods sold
Beginning inventory
710
$3,905
Purchases
Jan 12
680
$5,100
Jan 26
240
$2,280
Total
1630
6.923313
11285
770
6.92
5328.4
FIFO
Cost of goods available for sale
Cost of goods sold
No. of units
Cost per unit
Cost of goods available for sale
No. of units sold
Cost per uni
Cost of goods sold
Beginning inventory
710
$5.50
$3,905
Purchases
Jan 12
680
$7.50
$5,100
710
$5.50
$3,905
Jan 26
240
$9.50
$2,280
60
$7.50
$450
Total
770
$10.14
$7,810
LIFO
Cost of goods available for sale
Cost of goods sold
No. of units
Cost per unit
Cost of goods available for sale
No. of units sold
Cost per uni
Cost of goods sold
Beginning inventory
710
$5.50
$3,905
Purchases
Jan 12
680
$7.50
$5,100
240
$9.50
$2,280
Jan 26
240
$9.50
$2,280
530
$7.50
$3,975
Total
770
8.123377
6255
Specific identification Method
Cost of goods available for sale
Cost of goods sold
No. of units
Cost per unit
Cost of goods available for sale
No. of units sold
Cost per uni
Cost of goods sold
Beginning inventory
710
$5.50
$3,905
Purchases
Jan 12
680
$7.50
$5,100
570
$5.50
$3,135
Jan 26
240
$9.50
$2,280
200
$7.50
$1,500
Total
770
$6.02
$4,635
Donner company
Partial income statement
For the month ended January 31 2014
(a)
(b)
(c )
(d)
Average cost
FIFO
LIFO
Specific identification
SALES
14476
14476
14476
14476
Cost of goods sold
5328
$7,810
6255
$4,635
Net income
9148
6666
8221
9841
average cost
Cost of goods available for sale
Cost of goods sold
No. of units
Cost per unit
Cost of goods available for sale
No. of units sold
Cost per uni
Cost of goods sold
Beginning inventory
710
$3,905
Purchases
Jan 12
680
$5,100
Jan 26
240
$2,280
Total
1630
6.923313
11285
770
6.92
5328.4
FIFO
Cost of goods available for sale
Cost of goods sold
No. of units
Cost per unit
Cost of goods available for sale
No. of units sold
Cost per uni
Cost of goods sold
Beginning inventory
710
$5.50
$3,905
Purchases
Jan 12
680
$7.50
$5,100
710
$5.50
$3,905
Jan 26
240
$9.50
$2,280
60
$7.50
$450
Total
770
$10.14
$7,810
LIFO
Cost of goods available for sale
Cost of goods sold
No. of units
Cost per unit
Cost of goods available for sale
No. of units sold
Cost per uni
Cost of goods sold
Beginning inventory
710
$5.50
$3,905
Purchases
Jan 12
680
$7.50
$5,100
240
$9.50
$2,280
Jan 26
240
$9.50
$2,280
530
$7.50
$3,975
Total
770
8.123377
6255
Specific identification Method
Cost of goods available for sale
Cost of goods sold
No. of units
Cost per unit
Cost of goods available for sale
No. of units sold
Cost per uni
Cost of goods sold
Beginning inventory
710
$5.50
$3,905
Purchases
Jan 12
680
$7.50
$5,100
570
$5.50
$3,135
Jan 26
240
$9.50
$2,280
200
$7.50
$1,500
Total
770
$6.02
$4,635
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