Student Name: Instructor Class: McGraw-Hill/Irwin Problem 08-05 THE FERRIS COMPANY Inventory Cost of goods available for

sale for periodic system: Units 6,000 5,000 6,000 17,000 Unit cost 8.00 9.00 10.00 Total cost 48,000 105,000 153,000
Correct!

Beginning inventory Purchases Cost of goods available

$ $ $

$ $ 45,000 60,000 $

1. FIFO, periodic system Cost of goods available for sale Less: Ending inventory (calculation below) Cost of goods sold Cost of ending inventory: Date of purchase Jan. 18 Jan. 10 Totals

$ $

153,000 (78,000) 75,000

- Correct! - Correct!

Units 6,000 2,000 8,000

Correct!

Unit cost $ 10.00 9.00

$ $

Total cost 60,000 18,000 78,000

Correct!

2. LIFO, periodic system Cost of goods available for sale Less: Ending inventory (calculation below) Cost of goods sold Cost of ending inventory: Date of purchase Beginning inventory Jan. 10 Totals

$ $

153,000 (66,000) 87,000

- Correct! - Correct!

Units 6,000 2,000 8,000

Correct!

Unit cost $ 8.00 9.00

$ $

Total cost 48,000 18,000 66,000

Correct!

3. LIFO, perpetual system Date Beginning inventory January 5 January 10 January 12 January 18 January 20 Units 6,000 3,000 5,000 2,000 6,000 4,000 Unit cost Purchased 8.00 $48,000 8.00 9.00 $ 45,000 9.00 10.00 $ 60,000 10.00 Total cost of goods sold: Sold $ $ $ $ 24,000 18,000 40,000 82,000 $ $ $ $ $ $ Balance 48,000 24,000 69,000 51,000 111,000 71,000
- Correct!

$ $ $ $ $ $

- Correct!

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 08-05 4. Average cost, periodic system Cost of goods available for sale Less: Ending inventory (calculation below) Cost of goods sold Cost of ending inventory: Weighted Avg. Unit Cost $ 9.00 Ending Inventory $ 72,000

$ $

153,000 (72,000) 81,000

- Correct! - Correct!

Units 8,000 5. Average cost, perpetual system Date Beginning inventory January 5 January 10 January 12 January 18 January 20 Units 6,000 3,000 5,000 2,000 6,000 4,000

- Correct!

$ $ $ $ $ $

Unit cost Purchased 8.00 $48,000 8.00 $ 9.00 $ 45,000 8.63 $ 10.00 $ 60,000 9.31 Cost of goods sold: $

Sold 24,000 17,250 37,250 78,500 $ $ $ $ $ $

Balance 48,000 24,000 69,000 51,750 111,750 74,500

- Correct!

- Correct!

Given Data P08-05: FERRIS COMPANY Merchandise transactions: Purchases Unit Cost $ 9.00 $ 10.00

Date of Purchase Jan. 10 Jan. 18 Totals Sales Date of Sale Jan. 5 Jan. 12 Jan. 20 Total Beginning inventory, units Cost per unit, beginning inventory Units on hand, end of month

Units 5,000 6,000 11,000

Total Cost 45,000 60,000 $ 105,000 $

Units 3,000 2,000 4,000 9,000 6,000 8.00 8,000

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 08-06 Requirement 1: TOPANGA GROUP Inventory Cost of goods available for sale for periodic system: Units 5,000 12,000 17,000 34,000
Correct!

Beginning inventory Purchases Cost of goods available

$ $ $

Unit cost 4.00 4.50 5.00

Total cost 20,000 54,000 85,000 $ 159,000 $

Correct!

a. FIFO Cost of goods available for sale Less: Ending inventory (calculation below) Cost of goods sold Cost of ending inventory: Date of purchase March 22

$ $

159,000 (70,000) 89,000

- Correct! - Correct!

Units 14,000

Unit cost $ 5.00

Total cost 70,000

- Correct!

b. LIFO Cost of goods available for sale Less: Ending inventory (calculation below) Cost of goods sold Cost of ending inventory: Date of purchase Jan. 7 Feb. 16 Totals

$ $

159,000 (60,500) 98,500

- Correct! - Correct!

Units 5,000 9,000 14,000

Correct!

Unit cost $ 4.00 $ 4.50

$ $

Total cost 20,000 40,500 60,500

Correct!

c. Average cost Cost of goods available for sale Less: Ending inventory (calculation below) Cost of goods sold Cost of ending inventory:

$ $

159,000 (65,471) 93,529

- Correct! - Correct!

Units 14,000

Weighted Avg. Unit Cost $ 4.6765

Ending Inventory $ 65,471

- Correct!

Requirement 2: Gross Profit ratio: Gross Profit FIFO: LIFO: Average: $ $ $ 51,000 41,500 46,471 $ $ $ Gross Profit Ratio 36% 30% 33%
- Correct! - Correct! - Correct!

Sales 140,000 140,000 140,000

In situations when costs are rising, LIFO results in a higher cost of goods sold and, therefore, a lower gross profit ratio than FIFO.

Given Data P08-06: TOPANGA GROUP Merchandise transactions: Purchases Unit Cost $ 4.00 $ 4.50 $ 5.00

Date of Purchase Jan. 7 Feb. 16 March 22 Totals

Units 5,000 12,000 17,000 34,000

Total Cost $20,000 54,000 85,000 $159,000 20,000 $7.00 14,000

Number of units sold during quarter Sales price of all units sold in quarter Units on hand, end of quarter

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 08-07 CARLSON AUTO DEALERS INC. Computations Requirement 1: Beginning inventory Purchases:

$ 211 212 213 214 215 216 217 218 219 $ 63,000 63,000 64,500 66,000 69,000 70,500 72,000 72,300 75,000 $ $ $ Car ID 213 $ 216 219 $

183,000

Cost of goods available Cost of goods available for sale Less: Ending inventory (see below) Cost of goods sold Cost of ending inventory:

615,300 798,300 798,300 (210,000) 588,300 Cost 64,500 70,500 75,000 210,000

- Correct!

- Correct! - Correct!

Requirement 2: Cost of goods available for sale Less: Ending inventory (see below) Cost of goods sold Cost of ending inventory:

$ $ Car ID 219 $ 218 217 Total $

798,300 (219,300) 579,000 Cost 75,000 72,300 72,000 219,300

- Correct! - Correct!

- Correct!

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 08-07 Requirement 3: Cost of goods available for sale Less: Ending inventory (see below) Cost of goods sold Cost of ending inventory:

$ $ Car ID 203 $ 207 210 Total $

798,300 (183,000) 615,300 Cost 60,000 60,000 63,000 183,000

- Correct! - Correct!

- Correct!

Requirement 4: Cost of goods available for sale Less: Ending inventory (see below) Cost of goods sold Cost of ending inventory: Weighted average unit cost x number of cars in ending inventory Total

$ $

798,300 (199,575) 598,725

- Correct! - Correct!

$ $

66,525 3 199,575

- Correct! - Correct!

Given Data P08-07: CARLSON AUTO DEALERS INC. Cars in inventory at beginning of 2009: Car ID 203 207 210 Cost 60,000 60,000 63,000 Selling Price $ 90,000 90,000 90,000

Purchases and Sales: Car ID 211 212 213 214 215 216 217 218 219 Cost 63,000 63,000 64,500 66,000 69,000 70,500 72,000 72,300 75,000 Selling Price $ 90,000 93,000 not sold 96,000 100,500 not sold 105,000 106,500 not sold

Student Name: Instructor Class: McGraw-Hill/Irwin Problem 08-13

HINT: Don't ignore the column headers on the spreadsheet. (Base year costs do not usually equal year-end costs. TAYLOR COMPANY Inventory Ending Inventory Date At Base Year Cost 1/1/2011 $ 400,000 12/31/2011 $ 420,000 Year 2011 12/31/2012 $ 435,000 Year 2011 Year 2012 12/31/2013 $ 425,000 Year 2011 Year 2012 Inventory Layers At Base Year Cost $ 400,000 400,000 20,000 $ 400,000 20,000 15,000 $ 400,000 20,000 5,000 Inventory Layers Converted To Cost $ 400,000 400,000 21,000 $ 400,000 21,000 16,800 $ 400,000 21,000 5,600 Ending Inventory DVL Cost $ 400,000
Correct!

421,000
Correct!

437,800
Correct!

426,600
Correct!

Given Data P08-13: TAYLOR COMPANY Ending Inventory Date at Year-End Costs 12/31/2011 $441,000 12/31/2012 487,200 12/31/2013 510,000 Inventory value, 1/1/2011 Cost Index 1.05 1.12 1.20 $400,000