CCC6 CONTINUING COOKIE CHRONICLE
(a)
Feb. 2
Purchases …………………………………………
1,150
Accounts Payable ………………………
1,150
16
Cash …………………………………………………
1,100
Sales Revenue …………………………...
1,100
25
Accounts Payable ……………………………..
1,150
Cash ………………………………………….
1,150
Mar. 2
Purchases …………………………………………
Accounts Payable ………………………
30
Cash …………………………………………………
2,200
Sales Revenue …………………………...
2,200
31
Accounts Payable ……………………………..
Cash ………………………………………….
Apr. 1
Purchases …………………………………………
1,172
Accounts Payable ………………………
1,172
13
Cash …………………………………………………
3,300
Sales Revenue …………………………...
3,300
Accounts Payable ……………………………..
1,172
Cash ………………………………………….
1,172
May 4
Purchases …………………………………………
1,800
Accounts Payable ………………………
1,800
27
Cash …………………………………………………
1,100
Sales Revenue …………………………...
1,100
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
Mar. 2
Purchase
1
592
592
Apr. 1
Purchase
2
586
1,172
May 4
Purchase
3
600
1,800
Total
$6,424
(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
Feb. 2
1
Cost of goods sold
$4,139
4
$2,285
Gross Profit Rate
Less: Cost of goods sold
4,139
$7,700
Gross profit
$3,561
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
Apr. 1
1
586
Cost of goods sold
$4,038
4
$2,386
Gross Profit
Gross Profit Rate
Sales revenue
$7,700
$3,662
47.56%
Less: Cost of goods sold
$7,700
Gross Profit
$3,662
Average Cost
Ending Inventory
Cost of Goods Sold
$6,424/11 = $584
Cost of goods
available for sale
$6,424
Less: Ending inventory
$2,336
Units
Cost of goods sold
$4,088
$2,336
Gross Profit
Gross Profit Rate
Sales revenue
$7,700
$3,612
46.91%
Less: Cost of goods sold
4,088
$7,700
Gross profit
$3,612
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