Acc 422 E8-5, E8-14, E7-2, E7-8,
Acc 422 – Week 2 Solutions – Individual Assignments
EXERCISE 8-5 (15–20 minutes)
(a) Inventory December 31, 2007 (unadjusted) $234,890 Transaction 2 13,420 Transaction 3 -0- Transaction 4 -0- Transaction 5 8,540 Transaction 6 (10,438) Transaction 7 (10,520) Transaction 8 1,500 Inventory December 31, 2007 (adjusted) $237,392
(b) Transaction 3 Sales 12,800 Accounts Receivable 12,800 (To reverse sale entry in 2007) Transaction 4 Purchases (Inventory) 15,630 Accounts Payable 15,630 (To record purchase of merchandise in 2007) Transaction 8 Sales Returns and Allowances 2,600 Accounts Receivable 2,600
EXERCISE 8-14 (20–25 minutes)
(a) (1) LIFO 600 @ $6.00 = $3,600 100 @ $6.08 = 608 $4,208 (2) Average cost
Total cost = $33,655* = $6.35 average cost per unit Total units 5,300 700 @ $6.35 = $4,445
EXERCISE 8-14 (Continued)
*Units Price Total Cost
600 @ $6.00 = $ 3,600
1,500 @ $6.08 = 9,120
800 @ $6.40 = 5,120
1,200 @ $6.50 = 7,800
700 @ $6.60 = 4,620 500 @ $6.79 = 3,395
5,300 $33,655
(b) (1) FIFO 500 @ $6.79 = $3,395 200 @ $6.60 = 1,320 $4,715 (2) LIFO 100 @ $6.00 = $ 600 100 @ $6.08 = 608 500 @ $6.79 = 3,395 $4,603 (c) Total merchandise available for sale $33,655 Less inventory (FIFO) 4,715 Cost of goods sold $28,940 (d) FIFO.
13. The first-in, first-out method approximates the specific identification method when the physical flow of goods is on a FIFO basis. When the goods are subject to spoilage or deterioration, FIFO is parti-cularly appropriate. In comparison to the specific identification method, an attractive aspect of FIFO is the elimination of the danger of artificial determination of income by the selection of advan-tageously priced items to be sold. The basic
EXERCISE 8-5 (15–20 minutes)
(a) Inventory December 31, 2007 (unadjusted) $234,890 Transaction 2 13,420 Transaction 3 -0- Transaction 4 -0- Transaction 5 8,540 Transaction 6 (10,438) Transaction 7 (10,520) Transaction 8 1,500 Inventory December 31, 2007 (adjusted) $237,392
(b) Transaction 3 Sales 12,800 Accounts Receivable 12,800 (To reverse sale entry in 2007) Transaction 4 Purchases (Inventory) 15,630 Accounts Payable 15,630 (To record purchase of merchandise in 2007) Transaction 8 Sales Returns and Allowances 2,600 Accounts Receivable 2,600
EXERCISE 8-14 (20–25 minutes)
(a) (1) LIFO 600 @ $6.00 = $3,600 100 @ $6.08 = 608 $4,208 (2) Average cost
Total cost = $33,655* = $6.35 average cost per unit Total units 5,300 700 @ $6.35 = $4,445
EXERCISE 8-14 (Continued)
*Units Price Total Cost
600 @ $6.00 = $ 3,600
1,500 @ $6.08 = 9,120
800 @ $6.40 = 5,120
1,200 @ $6.50 = 7,800
700 @ $6.60 = 4,620 500 @ $6.79 = 3,395
5,300 $33,655
(b) (1) FIFO 500 @ $6.79 = $3,395 200 @ $6.60 = 1,320 $4,715 (2) LIFO 100 @ $6.00 = $ 600 100 @ $6.08 = 608 500 @ $6.79 = 3,395 $4,603 (c) Total merchandise available for sale $33,655 Less inventory (FIFO) 4,715 Cost of goods sold $28,940 (d) FIFO.
13. The first-in, first-out method approximates the specific identification method when the physical flow of goods is on a FIFO basis. When the goods are subject to spoilage or deterioration, FIFO is parti-cularly appropriate. In comparison to the specific identification method, an attractive aspect of FIFO is the elimination of the danger of artificial determination of income by the selection of advan-tageously priced items to be sold. The basic