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407
Problem 6-10AB (25 minutes)
WAYWARD COMPANY
Estimated Inventory at March 31
Goods available for sale
Inventory, January 1 ..............................................
$ 302,580
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 6
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
Apr. 6
30 @ $3,500.00
20 @ $3,000.00
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
Apr. 6
30 @ $3,500.00
20 @ $3,000.00
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. 6
30 @ $3,500.00
20 @ $3,000.00
412
Problem 6-1B (Concluded)
3d. Specific Identification
Cost of goods sold— 20 [8 + 12] units from beginning inventory
4.
FIFO
LIFO
Weighted
Average
Specific
Identification
Sales* ......................................
$770,000
$770,000
$770,000
$770,000
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
2. Units in ending inventory
Units available (from part 1) ............................
65 units
3.
Periodic Inventory
Ending
Inventory
Cost of
Goods Sold
a. FIFO
414
Problem 6-2B (Concluded)
4.
FIFO
LIFO
Weighted
Average
Specific
Identifi-
cation
Sales* ......................................
$770,000
$770,000
$770,000.00
$770,000
415
Problem 6-3B (40 minutes)
1. Compute cost of goods available for sale and units available for sale
Beginning inventory .......................
150 units @ $300
$ 45,000
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
Problem 6-3B (Continued)
3b. LIFO perpetual
Date
Goods Purchased
Cost of Goods Sold
Inventory Balance
May 1
150 @ $300 = $ 45,000
May 6
350 @ $350 = $122,500
150 @ $300
417
Problem 6-3B (Continued)
3c. Weighted Average perpetual
Date
Goods Purchased
Cost of Goods Sold
Inventory Balance
May 1
150 @ $300 = $ 45,000
May 6
350 @ $350 = $122,500
150 @ $300
3d. Specific Identification
Cost of goods sold— 80 units from beginning inventory
Problem 6-3B (Continued)
4.
FIFO
LIFO
Weighted
Average
Specific
Identifi-
cation
Sales* ......................................
$636,000
$636,000
$636,000
$636,000
5. The manager of Aloha Company likely will prefer the FIFO method
Problem 6-4B (40 minutes)
1. Compute cost of goods available for sale and units available for sale
Beginning inventory .......................
150 units @ $300
$ 45,000
2. Units in ending inventory
Units available (from part 1) ............................
680 units
Problem 6-4B (Concluded)
3.
Periodic Inventory
Ending
Inventory
Cost of
Goods Sold
a. FIFO
4.
FIFO
LIFO
Weighted
Average
Specific
Identifi-
cation
Sales* ......................................
$636,000
$636,000
$636,000
$636,000
5. The manager likely will prefer the FIFO method because it would yield
Problem 6-5B (50 minutes)
Per Unit
Total
Total
LCM Applied
Inventory Items
Units
Cost
Market
Cost
Market
to Items
Office furniture
Desks ....................
536
$261
$305
$139,896
$163,480
$139,896
2.
Dec 31
Cost of Goods Sold .....................................................
30,072
421
Problem 6-6B (35 minutes)
Part 1
(a)
Cost of goods sold
2016
2017
2018
Reported ...................................
$ 207,200
$ 213,800
$ 197,030
(b)
Net income
2016
2017
2018
(c)
Total current assets
2016
2017
2018
Reported ...................................
$ 276,000
$ 277,500
$ 272,950
(d)
Equity
2016
2017
2018
Reported ...........................................
$ 314,000
$ 315,000
$ 346,000
Part 2
Total net income for the combined three-year period ($572,980) is not affected by
Part 3
The overstatement of inventory by $18,000 results in an understatement of cost of
goods sold by that same amount. The $18,000 understatement of cost of goods
422
Problem 6-7BA (25 minutes)
Part 1
Number and total cost of units available for sale
6,500 units in beginning inventory @ $35 .............................
$ 227,500
Part 2
a. FIFO periodic
Total cost of 50,000 units available for sale.......
$1,560,000
b. LIFO periodic
Total cost of 50,000 units available for sale.......
$1,560,000
c. Weighted average periodic
423
Problem 6-8BA (30 minutes)
Part 1
SHEPARD COMPANY
Income Statements Comparing FIFO, LIFO, and Weighted Average
For Year Ended December 31, 2017
FIFO
LIFO
Weighted
Average
Sales ..............................................................
$400,000
$400,000
$400,000
Cost of goods sold
Supporting calculations
FIFO
LIFO
Weighted
Average
Purchases
600 x $59 = $ 35,400
