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Chapter 11 Inventories Answers

The document provides detailed inventory transactions and calculations for Bronze Company, Furlough Company, and Emcee Company, focusing on different inventory valuation methods such as FIFO, Weighted Average, and Specific Identification. It includes specific unit costs, total costs, and ending inventory calculations for each method. The document aims to illustrate the impact of these methods on financial reporting and inventory management.

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1K views2 pages

Chapter 11 Inventories Answers

The document provides detailed inventory transactions and calculations for Bronze Company, Furlough Company, and Emcee Company, focusing on different inventory valuation methods such as FIFO, Weighted Average, and Specific Identification. It includes specific unit costs, total costs, and ending inventory calculations for each method. The document aims to illustrate the impact of these methods on financial reporting and inventory management.

Uploaded by

Maire Exe
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Problem Solutions Chap 11 - Intermediate Accounting by Valix

BS Accountancy

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Problem 11-1 - Bronze Company Cont. Prob 11-2
Bronze Company had the following transacitons relating to 2. Weighted average - periodic
inventory during Jan units unit cost total cost
Units Unit Cost Beg. Inventory 10,000 80 800,000
Jan 1 Balance on hand 6,000 150 Pur - Lot 1 2,000 100 200,000
5 Purchase 2,000 200 2 8,000 110 880,000
10 Sale 4,000 3 6,000 120 720,000
15 Sale 1,000 4 9,500 100 950,000
20 Purchase 2,500 300 5 14,500 90 1,305,000
25 Purchase 2,000 400 GAFS 50,000 4,855,000
31 Sale 3,000 Weighted unit cost (4855000/50000) 97.10
Balance 4,500 Ending inventory cost (15,000 x 97.10) 1,456,500

Determine the ending inventory under each of the following: 3. Specific Identification
1. FIFO - start with the most recent purchase units unit cost total cost
Jan 25 Purchase (2000 x 400) 800,000 Lot 3 6,000 120 720,000
20 Purchase (2500 x 300) 750,000 4 9,000 100 900,000
Ending inventory 1,550,000 Ending inventory 15,000 1,620,000

2. Weighted Goods avail Inv-End COGS


Units Unit Cost Total Cost FIFO 4,855,000 1,355,000 3,500,000
Jan. 1 Balance 6,000 150 900,000 Weighted Average 4,855,000 1,456,500 3,398,500
5 Purchase 2,000 200 400,000 Spec. Iden. 4,855,000 1,620,000 3,235,000
20 Purchase 2,500 300 750,000
25 Purchae 2,000 400 800,000 Problem 11-3 Emcee Company
Goods available 12,500 2,850,000 Emcee Company provided the following info relating
to inventory for the month of Dec
Weighted average unit cost (2850000/12500) 228.00 Units UC Unit SP
Dec 1 Beg 10,000 52
Goods available for sale 12,500 7 Purchase 30,000 50
Less: Sales 8,000 12 Sale 20,000 90
Ending inventory 4,500 x 228 = 1,026,000 17 Purchase 60,000 45
22 Purchase 20,000 43
Problem 11-2 - Furlough Company 28 Sale 70,000 90
Furlough Company began operations at the beginning of Balance 30,000
current year with 10,000 units of merchandise with unit cost 1. FIFO Dec. 22 20,000 43 860,000
of P80. Purchase for the current year follow: Dec. 17 10,000 45 450,000
Lot No. Unit Unit cost 30,000 1,310,000
1 2,000 100 2. Weighted Average
2 8,000 110 Dec 1 10,000 52 520,000
3 6,000 120 Dec 7 30,000 50 1,500,000
4 9,500 100 Dec 17 60,000 45 2,700,000
5 14,500 90 Dec 22 20,000 43 860,000
The physical inventory revealed 15,000 units on hand at yr-end GAFS 120,000 5,580,000
1. FIFO Periodic Weighted unit cost (5,580,000/120,000) 46.50
units unit cost total cost Ending inventory cost (30,000 x 46.50) 1,395,000
Lot 5 14500 90 1,305,000
Lot 4 500 100 50,000 GAFS Ending Inv COGS
15,000 1,355,000 FIFO 5,580,000 1,310,000 4,270,000
Weighted Ave 5,580,000 1,395,000 4,185,000

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