Problem 6-9AB (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
Cost-to-retail ratio: $3,845,060/$7,310,000 = 0.526 or 52.6%
Ending inventory at cost ($1,757,000 x 52.6%)……….…. $ 924,182
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 6-10AB (25 minutes)
WAYWARD COMPANY
Estimated Inventory at March 31
Goods available for sale
Goods available for sale……………………………….... 1,243,620
Less estimated cost of goods sold
Sales…………………………………………………………..…. $1,211,160
Less sales returns……………..……..………..…………. (8,410)
Net sales……………………………………..………..………. $1,202,750
Estimated cost of goods sold
PROBLEM SET B
Problem 6-1B (40 minutes)
1. Compute cost of goods available for sale and units available for sale
Beginning inventory……..…………..…… 20 units @ $3,000 $ 60,000
2. Units in ending inventory
Units available (from part 1)…………...………....65 units
Problem 6-1B (Continued)
3a. FIFO perpetual
Date Goods Purchased Cost of Goods Sold Inventory Balance
Apr. 1 20 @ $3,000.00 = $ 60,000.00
= $ 22,500.00
Apr. 25 10 @ $4,800.00
= $ 48,000.00
15 @ $3,500.00
5 @ $4,500.00
10 @ $4,800.00 = $123,000.00
Problem 6-1B (Continued)
3b. LIFO perpetual
Date Goods Purchased Cost of Goods Sold Inventory Balance
Apr. 1 20 @ $3,000.00 = $ 60,000.00
= $120,000.00
Apr. 17 5 @ $4,500.00
= $ 22,500.00
15 @ $3,000.00
5 @ $4,500.00 = $ 67,500.00
Apr. 25 10 @ $4,800.00
15 @ $3,000.00
5 @ $4,500.00
= $100,500.00
Problem 6-1B (Continued)
3c. Weighted Average perpetual
Date Goods Purchased Cost of Goods Sold Inventory Balance
Apr. 1 20 @ $3,000.00 = $ 60,000.00
Apr. 17 5 @ $4,500.00
= $ 22,500.00
15 @ $3,300.00
5 @ $4,500.00 = $ 72,000.00
(avg. = $3,600.00)
Apr. 25 10 @ $4,800.00
15 @ $3,300.00
5 @ $4,500.00
Problem 6-1B (Concluded)
3d. Specific Identification
Date Goods Purchased Cost of Goods Sold Inventory Balance
Apr. 1 20 @ $3,000.00 = $ 60,000.00
= $118,500.00
Apr. 17 5 @ $4,500.00
= $ 22,500.00
12 @ $3,000.00
3 @ $3,500.00
5 @ $4,500.00 = $ 69,000.00
Apr. 25 10 @ $4,800.00
12 @ $3,000.00
3 @ $3,500.00
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
$235,500 [Total Goods Available] – $213,000 [Cost of Goods Sold]. . $22,500
4.
FIFO LIFO
Weighted
Average
Specific
Identification
Problem 6-2B (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
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
d. Specific identification
(5 x $4,500)………………………………………………………. $22,500.00
$235,500 [Goods Available] – $22,500 [Ending Inventory]........... $213,000.00
Problem 6-2B (Concluded)
4.
Weighted
Specific
Identifi-