Exercise 6-4 (concluded)
Requirement 3 Weighted average
Date Transaction
Number
of units
Unit
cost
Total
cost
Jan. 1 Beginning Inventory 50 $42 $ 2,100
Apr. 7 Purchase 130 44 5,720
Jul. 16 Purchase 200 47 9,400
Oct. 6 Purchase 110 48 5,280
Weighted-average cost = $22,500 / 490 units = $45.91837
(d) Gross pro,t = Sales revenue − Cost of goods sold
Requirement 4
FIFO LIFO Weighted-aver
age
Gross pro,t $6,300 $6,000 $6,195.92
FIFO results in higher pro,tability when inventory costs are rising.
Exercise 6-5 (LO 6-3)
Requirement 1 FIFO
(a)
Date Transaction
Number
of units
Unit
cost
Ending
Inventory
Nov. 11 Purchase 24 $18 $432
(b)
Date Transaction
Number
of units
Unit
cost
Cost of
Goods Sold
Jan. 1 Beginning inventory 20 $22 $ 440
Mar. 4 Purchase 25 21 525
Jun. 9 Purchase 30 20 600
a First 81 units purchased are assumed sold
(c) Sales revenue = 81 units × $30 = $2,430
(d) Gross pro,t = Sales revenue − Cost of goods sold
Exercise 6-5 (continued)
Requirement 2 LIFO
(a)
Date Transaction
Number
of units
Unit
cost
Ending
Inventory
Jan. 1 Beginning Inventory 20 $22 $440
Mar. 4 Purchase 4 21 84
(b)
Date Transaction
Number
of units
Unit
cost
Cost of
Goods Sold
Mar. 4 Purchase 21 $21 $ 441
Jun. 9 Purchase 30 20 600
Nov. 11 Purchase 30 18 540
* Last 81 units purchased are assumed sold
(c) Sales revenue = 81 units × $30 = $2,430
(d) Gross pro,t = Sales revenue − Cost of goods sold
Exercise 6-5 (concluded)
Requirement 3 Weighted average
Date Transaction
Number
of units
Unit
cost
Total
Cost
Jan. 1 Beginning Inventory 20 $22 $ 440
Mar. 4 Purchase 25 21 525
Jun. 9 Purchase 30 20 600
Nov. 11 Purchase 30 18 540
Weighted-average cost = $2,105 / 105 units = $20.04762
(a) Ending inventory = 24 units × $20.04762 = $481.14
(b) Cost of goods sold = 81 units × $20.04762 = $1,623.86
Requirement 4
FIFO LIFO Weighted-aver
age
Gross pro,t $757 $849 $806.14
LIFO results in higher pro,tability when inventory costs are declining.
Exercise 6-6 (LO 6-5)
Debit Credit
Inventory 310,000
Debit Credit
Accounts Receivable 520,000
Cost of Goods Sold 335,000
Exercise 6-7 (LO 6-5)
June 5 Debit Credit
Inventory 4,000
June 9 Debit Credit
Accounts Payable 800
June 16 Debit Credit
Accounts Receivable 5,600
Cost of Goods Sold 3,200
Exercise 6-8 (LO 6-5)
Requirement 1
June 5 Debit Credit
Inventory 3,800
June 12 Debit Credit
Accounts Payable 3,800
Inventory 76
Requirement 2
June 22 Debit Credit
Accounts Payable 3,800
Exercise 6-9 (LO 6-5)
Requirement 1
May 2 Debit Credit
Inventory 3,300
May 3
Inventory 200
May 5
Accounts Payable 400
May 10
Accounts Payable 2,900
Inventory 29
May 30
Accounts Receivable 4,000
Cost of Goods Sold 3,071
a $3,300 (purchase) + $200 (freight-in) − $400 (return) − $29 (discount)
Requirement 2
May 24 Debit Credit
Accounts Payable 2,900
Exercise 6-10 (LO 6-5)
July 5 Debit Credit
Inventory 100,000
July 8
Accounts Payable 5,000
July 13
Accounts Payable 95,000
Inventory 2,850
July 28
Accounts Receivable 114,000
Cost of Goods Sold 92,150
a $100,000 (purchase) − $5,000 (return) − $2,850 (discount)
Exercise 6-11 (LO 6-5)
August 6 Debit Credit
Inventory 14,000
August 7
Inventory 400
August 10
Accounts Payable 1,200
August 14
Accounts Payable 12,800
Inventory 128
August 23
Accounts Receivable 11,000
Cost of Goods Sold 10,212.50