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Chapter 06 - Inventory and Cost of Goods Sold
Chapter 6
Inventory and Cost of Goods Sold
EXERCISES
Exercise 6-1
Beginning inventory
$ 63,800
Add: Purchases
925,500
Exercise 6-2
Wayman Corporation
Multiple-step Income Statement
For the year ended December 31, 2018
Net sales
$250,100
Cost of goods sold
93,200
Gross profit
$156,900
Exercise 6-3
Requirement 1
Tisdale Incorporated
Multiple-step Income Statement
For the year ended December 31, 2018
Net sales
$320,500
Cost of goods sold
223,700
Gross profit
$ 96,800
Selling Expenses
36,400
Requirement 2
While Tisdale Incorporated is able to report positive net income ($68,300), the
company does not appear to have much profit-generating potential. For its core
operations, the company reports a negative operating income or loss (−$27,500). This
Exercise 6-4
Requirement 1
(a)
Date
Transaction
Number
of units
Unit
cost
Ending
Inventory
(b)
Date
Transaction
Number
of units
Unit
cost
Cost of
Goods Sold
Jan. 1
Beginning inventory
55
$31
$ 1,705
Apr. 7
Purchase
147
35
5,145
Chapter 06 - Inventory and Cost of Goods Sold
Exercise 6-4 (continued)
Requirement 2
(a)
Date
Transaction
Number
of units
Unit
cost
Ending
Inventory
(b)
Date
Transaction
Number
of units
Unit
cost
Cost of
Goods Sold
Jan. 1
Beginning Inventory
4
$31
$ 124
Apr. 7
Purchase
147
35
5,145
Exercise 6-4 (concluded)
Requirement 3
Date
Transaction
Number
of units
Unit
Cost
Total
cost
Jan. 1
Beginning Inventory
55
$31
$ 1,705
Requirement 4
FIFO
LIFO
Weighted-
average
FIFO results in higher profitability when inventory costs are rising.
Exercise 6-5
Requirement 1
(a)
Date
Transaction
Number
of units
Unit
cost
Ending
Inventory
Jun. 9
Purchase
5
$10
50
(b)
Date
Transaction
Number
of units
Unit
cost
Cost of
Goods Sold
Jan. 1
Beginning inventory
11
$21
$231
* First 65 units purchased are assumed sold
Exercise 6-5 (continued)
Requirement 2
(a)
Date
Transaction
Number
of units
Unit
cost
Ending
Inventory
Jan. 1
Beginning Inventory
11
$21
$231
(b)
Date
Transaction
Number
of units
Unit
cost
Cost of
Goods Sold
Mar. 4
Purchase
32
$14
$448
Chapter 06 - Inventory and Cost of Goods Sold
Exercise 6-5 (concluded)
Requirement 3
Date
Transaction
Number
of units
Unit
cost
Total
Cost
Jan. 1
Beginning Inventory
11
$21
$ 231
Mar. 4
Purchase
41
14
574
Weighted-average cost = $1,105 / 85 units = $13
Requirement 4
FIFO
LIFO
Weighted-
average
Exercise 6-6
Debit
Credit
Inventory
320,000
Accounts Payable
320,000
(Purchase inventory on account)
Exercise 6-7
June 5
Debit
Credit
Inventory
1,800
Accounts Payable
1,800
(Purchase inventory on account)
June 9
Debit
Credit
Accounts Payable
450
Exercise 6-8
Requirement 1
June 5
Debit
Credit
Inventory
1,800
Accounts Payable
1,800
June 12
Debit
Credit
Requirement 2
June 22
Debit
Credit
Accounts Payable
1,800
