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Exercise 6-4 (continued)
Requirement 2 LIFO
(a)
Date
Transaction
Number
of units
Unit
cost
Ending
Inventory
(b)
Date
Transaction
Number
of units
Unit
cost
Cost of
Goods Sold
Apr. 7
Purchase
120
$54
$ 6,480
a Last 440 units purchased are assumed sold
6-22 Financial Accounting, 5e
Exercise 6-4 (concluded)
Requirement 3 Weighted average
Date
Transaction
Number
of units
Unit
cost
Total
cost
Jan. 1
Beginning Inventory
60
$52
$ 3,120
Weighted-average cost = $29,610 / 530 units = $55.8679
(a) Ending inventory = 80 units × $55.8679 = $4,469
Requirement 4
FIFO
LIFO
Weighted-
average
Chapter 6 - Inventory and Cost of Goods Sold
Exercise 6-5 (LO 6-3)
Requirement 1 FIFO
(a)
Date
Transaction
Number
of units
Unit
cost
Ending
Inventory
(b)
Date
Transaction
Number
of units
Unit
cost
Cost of
Goods Sold
a First 81 units purchased are assumed sold
Exercise 6-5 (continued)
Requirement 2 LIFO
(a)
Date
Transaction
Number
of units
Unit
cost
Ending
Inventory
(b)
Date
Transaction
Number
of units
Unit
cost
Cost of
Goods Sold
Mar. 4
Purchase
21
$21
$ 441
* Last 81 units purchased are assumed 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
Weighted-average cost = $2,105 / 105 units = $20.04762
Requirement 4
FIFO
LIFO
Weighted-
average
Chapter 6 - Inventory and Cost of Goods Sold
6-26 Financial Accounting, 5e
Exercise 6-6 (LO 6-5)
Debit
Credit
Inventory
310,000
Accounts Payable
310,000
(Purchase inventory on account)
Chapter 6 - Inventory and Cost of Goods Sold
Exercise 6-7 (LO 6-5)
June 5
Debit
Credit
Inventory
4,000
Accounts Payable
4,000
(Purchase inventory on account)
June 16
Debit
Credit
Accounts Receivable
5,600
Sales Revenue
5,600
(Sell inventory on account)
($5,600 = 160 units × $35 unit price)
Chapter 6 - Inventory and Cost of Goods Sold
Exercise 6-8 (LO 6-5)
Requirement 1
June 5
Debit
Credit
Inventory
3,800
Requirement 2
June 22
Debit
Credit
Chapter 6 - Inventory and Cost of Goods Sold
Exercise 6-9 (LO 6-5)
Requirement 1
May 2
Debit
Credit
Inventory
3,300
Accounts Payable
3,300
(Purchase inventory on account)
May 3
(Return inventory on account)
May 10
Accounts Payable
2,900
Inventory
29
Cash
2,871
(Pay on account with 1% discount)
($29 = $2,900 × 1%)
Requirement 2
May 24
Debit
Credit
Accounts Payable
2,900
Cash
2,900
Chapter 6 - Inventory and Cost of Goods Sold
6-30 Financial Accounting, 5e
Chapter 6 - Inventory and Cost of Goods Sold
Exercise 6-10 (LO 6-5)
July 5
Debit
Credit
Inventory
100,000
Accounts Payable
100,000
(Purchase inventory on account)
July 28
Accounts Receivable
114,000
Sales Revenue
114,000
(Sell inventory on account)
Exercise 6-11 (LO 6-5)
August 6
Debit
Credit
Inventory
14,000
Accounts Payable
14,000
(Purchase inventory on account)
August 7
August 14
Accounts Payable
12,800
Inventory
128
Cash
12,672
(Pay cash on account with 1% discount)
($128 = $12,800 × 1%)
Chapter 6 - Inventory and Cost of Goods Sold
Exercise 6-12 (LO 6-5)
August 6
Accounts Receivable
14,000
Sales Revenue
14,000
Chapter 6 - Inventory and Cost of Goods Sold
6-34 Financial Accounting, 5e
Exercise 6-13 (LO 6-6)
Requirement 1
Inventory
Quantity
Unit
Cost
Total
Recorded
Cost
Requirement 2
Inventory
Quantity
Lower of Cost
and NRV
per unit
Ending
Inventory
Requirement 3
Debit
Credit
Cost of Goods Sold
5,000
Inventory
5,000
(Adjust inventory down to net realizable value)
(50 units of electronics × $100)
Requirement 4
Chapter 6 - Inventory and Cost of Goods Sold
Exercise 6-14 (LO 6-6)
Requirement 1
Inventory
Quantity
Unit
Cost
Total
Recorded
Cost
Shirts
35
$ 60
$ 2,100
Requirement 2
Inventory
Quantity
Lower of Cost
and NRV
per unit
Ending
Inventory
Shirts
35
$ 60
$ 2,100
Requirement 3
Debit
Credit
Cost of Goods Sold
1,650
Requirement 4
The write-down of inventory has the effect of reducing total assets (inventory),
Exercise 6-15 (LO 6-2, 6-7)
Requirement 1
Lewis
Clark
Beginning inventory
$ 24,000
$ 50,000
Cost of goods sold
$252,000
$165,000
Requirement 2
Lewis
Clark
Inventory
Requirement 3
Lewis
Clark
Average
365
365
365
Requirement 4
Lewis seems to be managing its inventory more efficiently. For Lewis, inventory turns
Chapter 6 - Inventory and Cost of Goods Sold
Exercise 6-16 (LO 6-2, 6-7)
Requirement 1
Gross
Profita
Operating
Incomeb
Income Before
Income Taxesc
Net
Incomed
a Gross profit = Sales revenue − Cost of goods sold
Requirement 2
Henry
Grace
James
Gross
Gross profit
$27,200
$10,500
$15,200
6-38 Financial Accounting, 5e
Exercise 6-17 (LO 6-8)
Requirement 1
May 2
Debit
Credit
Purchases
3,300
Accounts Payable
3,300
(Purchase inventory on account)
May 3
May 10
Accounts Payable
2,900
Purchase Discounts
29
Cash
2,871
Requirement 2
May 31
Debit
Credit
Cost of Goods Sold
3,071
Purchase Returns
400
Chapter 6 - Inventory and Cost of Goods Sold
Exercise 6-18 (LO 6-8)
Requirement 1
July 5
Debit
Credit
Purchases
100,000
Accounts Payable
100,000
(Purchase inventory on account)
(Sell inventory on account)
Requirement 2
July 31
Debit
Credit
Cost of Goods Sold
92,150
Purchase Returns
5,000
Exercise 6-19 (LO 6-9)
August 6
Debit
Credit
Purchases
14,000
Accounts Payable
14,000
(Purchase inventory on account)
August 14
Accounts Payable
12,800
Purchase Discounts
128
Cash
12,672
(Pay cash on account with 1% discount)
($128 = $12,800 × 1%)
August 23
Requirement 2
August 31
Debit
Credit
Inventory (ending)
2,859.50
