Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
CCC6 CONTINUING COOKIE CHRONICLE
(a)
Feb. 2
Purchases ................................................
1,150
Accounts Payable ...........................
1,150
16
Cash .........................................................
1,100
Sales Revenue .................................
1,100
Apr. 1
Purchases ................................................
1,172
Accounts Payable ...........................
1,172
13
Cash .........................................................
3,300
Sales Revenue .................................
3,300
CONTINUING COOKIE CHRONICLE (Continued)
(b) COST OF GOODS AVAILABLE FOR SALE
Date
Explanation
Units
Unit Cost
Total Cost
Feb. 1
Beginning Inventory
3
$570
$1,710
Feb. 2
Purchase
2
575
1,150
(c)
LIFO
Ending Inventory
Cost of Goods sold
Date
Units
Unit
Cost
Total
Cost
Cost of goods
available for sale
$6,424
Feb. 1
3
$570
$1,710
Less: Ending inventory
2,285
CONTINUING COOKIE CHRONICLE (Continued)
FIFO
Ending Inventory
Cost of Goods sold
Date
Units
Unit
Cost
Total
Cost
Cost of goods
available for sale
$6,424
May 4
3
$600
$1,800
Less: Ending inventory
2,386
Gross Profit
Gross Profit Rate
Sales revenue
$7,700
$3,662
47.56%
Average Cost
Ending Inventory
Cost of Goods Sold
$6,424/11 = $584
Cost of goods
available for sale
$6,424
Gross Profit
Gross Profit Rate
Sales revenue
$7,700
$3,612
46.91%
CONTINUING COOKIE CHRONICLE (Continued)
(d) It should not actually matter which cost flow assumption Natalie chooses
for the purpose of the bank loan. Bankers should be able to recognize
