The National Arts Society (TNAS), a not-for-profit organization that provides gr
ID: 2647624 • Letter: T
Question
The National Arts Society (TNAS), a not-for-profit organization that provides grants to arts programs, distributes coffee mugs to individuals who donate over $50 to the organization annually. TNAS began FY 2013 on July 1st with 20 mugs valued at $47 in total. On September 1st, the organization purchased an additional 100 mugs at a cost of $2.60 per mug. On December 15th, TNAS took advantage of a promotional offer from a vendor and purchased an additional 50 mugs for $105 in total. At the end of FY 2013, TNAS had 45 mugs remaining in its inventory. The organization uses LIFO.
a) What is The National Arts Society
Explanation / Answer
Answer:
Following the FIFO method :
(a) Calculation of Supplies Expense:
Total units available for sale = (20+100+50) = 170 mugs
Total units in ending inventory = 45 Mugs
Hence Units sold or distributed = 170-45 = 125 mugs
50 Mugs @ ($105/50) each = $105
75 Mugs @$2.60 = $195
Total Supplies expense = 105+195 = $300
(b) calculation of inventory balance :
Total cost of goods Available = (20mugs*$47) + (100 mugs*$2.60) + $105 = $1305
Hence Cost of ending inventory = Total Cost of units available
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