Problem 5-9AB (25 minutes)
Part 1
ALASKA COMPANY
Estimated Inventory
December 31
At Cost At Retail
Goods available for sale
Beginning inventory………………………….…….…... $ 469,010 $ 928,950
Cost of goods purchased…………….….……..……. 3,376,050 6,381,050
Goods available for sale
……………………………….
$3,845,060 $7,310,000
Part 2
Estimated physical inventory at cost: $1,686,900 x 52.6% = $887,309
ALASKA COMPANY
Inventory Shortage
December 31
At Cost At Retail
Estimated inventory (from part 1)………………………..$ 924,182 $ 1,757,000
Problem 5-10AB (25 minutes)
WAYWARD COMPANY
Estimated Inventory at March 31
Goods available for sale
Inventory, January 1………………….….….….….……..$ 302,580
Cost of goods purchased……………………………….. 941,040
Goods available for sale…………………………………. 1,243,620
Less estimated cost of goods sold
Estimated March 31 inventory…………………….….….$ 449,805
PROBLEM SET B
Problem 5-1B (40 minutes)
1. Compute cost of goods available for sale and units available for sale
Beginning inventory………..….….……... 20 units @ $3,000 $ 60,000
April 6…………………………………………… 30 units @ $3,500 105,000
2. Units in ending inventory
Problem 5-1B (Continued)
3a. FIFO perpetual
Date Goods Purchased Cost of Goods Sold Inventory Balance
Apr. 1 20 @ $3,000.00 = $ 60,000.00
Apr. 6 30 @ $3,500.00
= $105,000.00
20 @ $3,000.00
30 @ $3,500.00 = $165,000.00
Apr. 9 20 @ $3,000.00
15 @ $3,500.00
= $112,500.00
15 @ $3,500.00 = $ 52,500.00
15 @ $3,500.00
Problem 5-1B (Continued)
3b. LIFO perpetual
Date Goods Purchased Cost of Goods Sold Inventory Balance
Apr. 1 20 @ $3,000.00 = $ 60,000.00
Apr. 6 30 @ $3,500.00
= $105,000.00
20 @ $3,000.00
30 @ $3,500.00 = $165,000.00
Apr. 9 30 @ $3,500.00
5 @ $3,000.00
= $120,000.00
15 @ $3,000.00 = $ 45,000.00
15 @ $3,000.00
Problem 5-1B (Continued)
3c. Weighted Average perpetual
Date Goods Purchased Cost of Goods Sold Inventory Balance
Apr. 1 20 @ $3,000.00 = $ 60,000.00
Apr. 6 30 @ $3,500.00
= $105,000.00
20 @ $3,000.00
30 @ $3,500.00 = $165,000.00
(avg. = $3,300.00)
Apr. 30 25 @ $4,000.00
= $100,000.00
5 @ $4,000.00 = $ 20,000.00
(avg. = $4,000.00)
$215,500.00
Problem 5-1B (Concluded)
3d. Specific Identification
Date Goods Purchased Cost of Goods Sold Inventory Balance
Apr. 1 20 @ $3,000.00 = $ 60,000.00
Apr. 6 30 @ $3,500.00
= $105,000.00
20 @ $3,000.00
30 @ $3,500.00 = $165,000.00
Apr. 9 8 @ $3,000.00
27 @ $3,500.00
= $118,500.00
12 @ $3,000.00
3 @ $3,500.00 = $ 46,500.00
12 @ $3,000.00
Apr. 30 12 @ $3,000.00
3 @ $3,500.00
10 @ $4,800.00
= $ 94,500.00
5 @ $4,500.00 = $ 22,500.00
$213,000.00
Specific identification—Alternative Computation
Cost of goods sold—20 [8+12] units from beginning inventory, 30 [27+3] units from
April 6 purchase, and 10 units from April 25 purchase
Ending Cost of
Specific Identification Inventory Goods Sold
(20 x $3,000) + (30 x $3,500) + (10 x $4,800)….….…. $213,000
$235,500 [Total Goods Available] – $213,000 [Cost of Goods Sold]. . $22,500
4.
FIFO LIFO
Weighted
Average
Specific
Identification
1. Compute cost of goods available for sale and units available for sale
Beginning inventory………..….….……... 20 units @ $3,000 $ 60,000
April 6…………………………………………… 30 units @ $3,500 105,000
2. Units in ending inventory
3.
Periodic Inventory
Ending
Inventory
Cost of
Goods Sold
a. FIFO
(5 x $4,800)…………………………….………………………… $24,000.00
(20x$3,000)+(30x$3,500)+(5x$4,500)+(5x$4,800)... $211,500.00
b. LIFO
(5 x $3,000)…………………………….….…….…….….……. $15,000.00
(15x$3,000)+(30x$3,500)+(5x$4,500)+(10x$4,800). $220,500.00
Problem 5-2B (Concluded)
4.
FIFO LIFO
Weighted
Average
Specific
Identifi-
cation
Sales*………………………….……..$770,000 $770,000 $770,000.00 $770,000
Problem 5-3B (40 minutes)
1. Compute cost of goods available for sale and units available for sale
Beginning inventory………..….….……... 150 units @ $300 $ 45,000
May 6………………..………………..……..…. 350 units @ $350 122,500
2. Units in ending inventory
Units available (from part 1)…………….….……..680 units
3a. FIFO perpetual
Date Goods Purchased Cost of Goods Sold Inventory Balance
May 1 150 @ $300 = $ 45,000
May 6 350 @ $350 = $122,500 150 @ $300
350 @ $350 = $167,500
May 9 150 @ $300 = $ 45,000
30 @ $350 = $ 10,500
320 @ $350 = $112,000
May 30 300 @ $350 = $105,000
20 @ $350
80 @ $450
100 @ $458 = $ 88,800
$160,500