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    Cae08 - Activity Chapter 2

    Uploaded by

    Jr Villariez
    This document contains 5 solutions to cost accounting problems involving calculations of cost of goods sold. Each solution shows the calculations using inventory accounts to determine the cost of goods sold for a merchandising company based on information provided about beginning inventory, purchases/manufacturing costs, and ending inventory for a given period.

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    Cae08 - Activity Chapter 2

    Uploaded by

    Jr Villariez
    482 views4 pages
    This document contains 5 solutions to cost accounting problems involving calculations of cost of goods sold. Each solution shows the calculations using inventory accounts to determine the cost of goods sold for a merchandising company based on information provided about beginning inventory, purchases/manufacturing costs, and ending inventory for a given period.

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    CAE08 - ACTIVITY CHAPTER 2

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    This document contains 5 solutions to cost accounting problems involving calculations of cost of goods sold. Each solution shows the calculations using inventory accounts to determine the cost of goods sold for a merchandising company based on information provided about beginning inventory, purchases/manufacturing costs, and ending inventory for a given period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    482 views4 pages

    Cae08 - Activity Chapter 2

    Uploaded by

    Jr Villariez
    This document contains 5 solutions to cost accounting problems involving calculations of cost of goods sold. Each solution shows the calculations using inventory accounts to determine the cost of goods sold for a merchandising company based on information provided about beginning inventory, purchases/manufacturing costs, and ending inventory for a given period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    ACTIVITY CAE08: COST ACCOUNTING AND CONTROL

    ACTIVITY CHAPTER 2

    RIVERA, KIM JEAN V.


    20195683
    BSA
    OL22E46

    DIRECTIONS:
    Show your solution on POST TEST in good form.

    Solution 1

    Gabrio Inc. is a merchandising company. Last month the company's


    merchandise purchases totaled $87,000. The company's beginning
    merchandise inventory was$19,000 and its ending merchandise inventory
    was $11,000. What was the company’s cost of goods sold for the month?

    A)$79,000
    B)$87,000
    C)$95,000
    D)$117,000

    SOLUTION:

    Merchandise inventory, beginning......................................$19,000


    Add: Merchandise purchased.............................................. 87,000
    Goods available for sale......................................................106,000
    Deduct: Finished goods inventory, ending......................... 11,000
    Cost of goods sold...............................................................$ 95,000

    1
    Solution 2

    At the beginning of the most recent month’s operations, finished goods


    inventory was $30,000. The cost of goods manufactured was $326,000 and
    ending finished goods inventory was $42,000. What was the cost of goods
    sold for the month?

    A)$320,000
    B)$338,000
    C)$314,000
    D)Cannot be calculated

    SOLUTION:

    Finished goods inventory, beginning…………………………….$30,000


    Add: Cost of goods manufactured……………………………….. 326,000
    Goods available for sale………………………………………………356,000
    Deduct: Finished goods inventory, ending……………………. 42,000
    Cost of goods sold………………………………………………………$314,000

    Solution 3

    Haala Inc. is a merchandising company. Last month the company’s cost of


    goods sold was $68,000. The company’s beginning merchandise inventory
    was $11,000 and it sending merchandise inventory was $17,000. What was
    the total amount of the company’s merchandise purchases for the month?

    A)$96,000
    B)$62,000
    C)$68,000
    D)$74,000

    SOLUTION:

    Merchandise inventory, beginning………………………………..$11,000


    Add: Merchandise purchased………………………………………. ?
    Goods available for sale………………………………………………?
    Deduct: Finished goods inventory, ending……………………. 17,000
    Cost of goods sold………………………………………………………$68,000
    2
    Goods available for sale = $68,000 + $17,000
    Goods available for sale = $85,000

    Merchandise purchased = $85,000 – Merchandise inventory, beginning


    Merchandise purchased = $85,000 − $11,000
    Merchandise purchased = $74,000

    Solution 4

    The cost of goods manufactured for October at Toule Manufacturing


    Corporation was $907,000. The following changes occurred in Toule inventory
    accounts during October:

    Decrease in raw materials inventory……….$24,000


    Decrease in work in process inventory……$17,000
    Increase in finished goods inventory………$38,000

    What was Toule’s cost of goods sold for October?


    A)$869,000
    B)$886,000
    C)$928,000
    D)$945,000

    SOLUTION:

    Beginning finished Cost of goods Ending finished Cost of


    goods inventory + manufactured – goods inventory = goods sold

    REARRANGING

    Cost of goods Beginning finished Ending finished Cost of


    Manufactured + ( goods inventory – goods inventory ) = goods
    sold

    Cost of goods
    $907,000 + ( - $38,000) = sold

    $869,000

    3
    ACTIVITY

    Solution 5

    During July, the cost of goods manufactured at Xxis Corporation was $70,000.
    The beginning finished goods inventory was $19,000 and the ending finished
    goods inventory was $15,000. What was the cost of goods sold for the month?

    A)$104,000
    B)$74,000
    C)$70,000
    D)$66,000

    Finished goods inventory, beginning…………………………….$19,000


    Add: Cost of goods manufactured……………………………….. 70,000
    Goods available for sale………………………………………………89,000
    Deduct: Finished goods inventory, ending……………………. 15,000
    Cost of goods sold………………………………………………………$74,000

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