Practice Problem……………………..

chapter 6

1. A company made the following merchandise purchases and sales during the month of
July:

July 1 purchased 380 units at $15 each

July 5 purchased 270 units at $20 each
July 9 sold 500 units at $55 each
July 14 purchased 300 units at $24 each
July 20 sold 250 units at $55 each
July 30 purchased 250 units at $30 each

There was no beginning inventory. If the company uses the first-in, first-out method and
the perpetual system, what would be the cost of the ending inventory?  

Answer:

Purchases Sales Balance

Date Units Unit Total Units Unit Total Units Unit Total
cost cost cost
7/1 380 $15 $5,700 380 $15 $ 5,700
380 $15 $ 5,700
270 $20 5,400
7/5 270 $20 $5,4 650 $11,100
7/9 00 380 $15 $5,700
120 $20 2,400 150 $20 $ 3,000
7/14 300 $24 $7,2 150 $20 $ 3,000
00 300 $24 7,200
450 $10,200
7/20 150 $20 $3,000
100 $24 2,400 200 $24 $ 4,800
7/30 250 $30 $7,5 200 $24 $ 4,800
00 250 $30 7,500
450 $12,300

 
2. A company made the following merchandise purchases and sales during the current
month:

July. 1 purchased 380 units at $15 each

July 5 purchased 270 units at $20 each
July 9 sold 500 units at $55 e a c h
July 14 purchased 300 units at $24 each
July 20 sold 250 units at $55 each
July 30 purchased 250 units at $30 each

There was no beginning inventory. If the company uses the last-in, first-out perpetual
inventory system, what would be the cost of the ending inventory? 

Answer:
Purchase
Date s Sales Balance Total
Units Unit Total Units Unit Total Units Unit
cost cost cost
7/1 380 $15 $5,700 380 $15 $ 5,700
7/5 270 $20 $5,400 380 $15 $ 5,700
270 $20 5,400
650 $11,100
7/9 270 $20 $5,400
230 $15 3,450 150 $15 $ 2,250
7/14 300 $24 $7,200 150 $15 $ 2,250
300 $24 7,200
450 $ 9,450
7/20 250 $24 $6,000 150 $15 $ 2,250
50 $24 1,200
200 $ 3,450
7/30 250 $30 $7,500 150 $15 $ 2,250
50 $24 1,200
250 $30 7,500
450 $10,950

 
3. Using the information given below for a company that uses a perpetual inventory system,
calculate the ending inventory using FIFO. 

Unit
Units Cost
Beginning inventory 100 $10
Jan. 5 purchased 40 12
Jan. 10 sold 60 -
Jan. 15 purchased 70 13
Jan. 25 sold 50
-

 Answer:
Purchases Sales Balance
Unit Unit Unit

Date Units cost Total Units cost Total Units cost Total
1/1 100 $10 $1,000
1/5 40 $12 $480 100 $10 $1,000
40 $12 480
140 $1,480
1/10 60 $10 $600 40 $10 $ 400
40 $12 480
80 $ 880
1/15 70 $13 $910 40 $10 $ 400
40 $12 480
70 $13 910
150 $1,790
1/25 40 $10 $400 30 $12 $ 360
10 $12 120 70 $13 910
100 $1,270
4. A company reported the current month purchase and sales data for its only product and
uses the perpetual inventory system. Determine the cost assigned to ending inventory and
cost of goods sold using FIFO.

Date Activities Units Acquired at Cost Units Sold at Retail

April 1 Beginning Inventory 175 units @ $15.00
4 Purchase 150 units @ $16.00
7 Sales 160 units @ $30.00
10 Purchase 200 units @ $17.00
16 Sales 250 units @ $30.00
25 Purchase 160 units @ $18.00
28 Sales 150 units @ $32.00

Answer:

Purchases Cost of goods sold Balance

Unit Unit Unit
cost cost cost
Date Unit Total Units Total Units Total
s
4/1 175 $15 $2,625
4/4 150 $16 $2,400 175 $15 $2,625
150 $16 2,400
325 $5,025
4/7 160 $15 $2,40 15 $15 $ 225
0
150 $16 2,400
165 $2,625
4/10 200 $17 $3,400 15 $15 $225
150 $16 2,400
3,400
200 $17
 365 $6,025
4/16 15 $15 $225
150 $16 $2,40
0
85 $17 115 $17 $1,955
$1,44
5
4/25 160 $18 $2,880 115 $17 $ 1,955
160 $18 $ 2,880
275 $4,835
4/28 115 $17 $1,95
5 2,250
35 $18 125 $18
$630
Totals $9,05 $2,250
5

 5.  A company reported the current month purchase and sales data for its only product and
uses the perpetual inventory system. Determine the cost assigned to ending inventory and
cost of goods sold using LIFO.

Date Activities Units Acquired at Cost Units Sold at Retail

April 1 Beginning Inventory 175 units @ $15.00
4 Purchase 150 units @ $16.00
7 Sales 160 units @ $30.00
10 Purchase 200 units @ $17.00
16 Sales 250 units @ $30.00
25 Purchase 160 units @ $18.00
28 Sales 150 units @ $32.00
Answer:

Purchases Cost of goods sold Balance

Unit Unit Unit
cost cost cost
Date Unit Total Units Total Units Total
s
4/1 175 $15 $2,625
4/4 150 $16 $2,400 175 $15 $2,625
150 $16 2,400
325 $5,025
4/7 150 $16 $2,40
0
10 $15 165 $15 $2,475
150
4/10 200 $17 $3,400 165 $15 $2,475
200 $17 3,400
365 $5,875
4/16 200 $17 $3,40
0
50 $15 115 $15 $1,725
$750
4/25 160 $18 $2,880 115 $15 $ 1,725
160 $18 $ 2,880
275 $4,605
4/28 150 $18 $2,70 115 $15 $1,725
0 180
10 $18

Totals $9,40 $1,905

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