Exercise 6-4 (continued)
Requirement 2 LIFO
(a)
Date
Transaction
Number
of units
Unit
cost
Ending
Inventory
Apr. 7
Purchase
(b)
Date
Transaction
Number
of units
Unit
cost
Cost of
Goods Sold
Apr. 7
Purchase
120
$54
$ 6,480
Jul. 16
Purchase
210
$25,410
a Last 440 units purchased are assumed sold
6-22 Financial Accounting, 5e
Exercise 6-4 (concluded)
Requirement 3 Weighted average
Transaction
Number
of units
Unit
cost
Total
cost
Beginning Inventory
60
$52
$ 3,120
Purchase
140
Purchase
210
Purchase
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
Nov. 11
Purchase
(b)
Date
Transaction
Number
of units
Unit
cost
Cost of
Goods Sold
Jan. 1
Beginning inventory
Mar. 4
Purchase
Nov. 11
Purchase
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
Mar. 4
Purchase
(b)
Date
Transaction
Number
of units
Unit
cost
Cost of
Goods Sold
Mar. 4
Purchase
21
$21
$ 441
Jun. 9
Purchase
* 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
Mar. 4
Purchase
Jun. 9
Purchase
Nov. 11
Purchase
$2,105
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)
Accounts Receivable
Sales Revenue
520,000
Cost of Goods Sold
Inventory
335,000
(Cost of inventory sold)
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 9
Debit
Credit
Accounts Payable
Inventory
($800 = 40 units × $20 unit cost)
June 16
Debit
Credit
Accounts Receivable
5,600
Sales Revenue
5,600
(Sell inventory on account)
($5,600 = 160 units × $35 unit price)
Cost of Goods Sold
3,200
(Record cost of inventory sold)
($3,200 = 160 units × $20 unit cost)
Chapter 6 – Inventory and Cost of Goods Sold
Exercise 6-8 (LO 6-5)
Requirement 1
June 5
Debit
Credit
Inventory
3,800
Accounts Payable
3,800
Requirement 2
June 22
Debit
Credit
Accounts Payable
3,800
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
Inventory
Cash
May 5
Accounts Payable
Inventory
(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%)
May 30
Sales Revenue
4,000
(Sell inventory on account)
Cost of Goods Sold
Inventory
(Record cost of inventory sold)
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 8
Accounts Payable
Inventory
(Return inventory on account)
July 13
Accounts Payable
Inventory
Cash
July 28
Accounts Receivable
114,000
Sales Revenue
114,000
(Sell inventory on account)
Inventory
(Record cost of inventory sold)
Exercise 6-11 (LO 6-5)
August 6
Debit
Credit
Inventory
14,000
Accounts Payable
14,000
(Purchase inventory on account)
August 7
Inventory
Cash
(Pay freight-in cost)
August 10
Accounts Payable
Inventory
August 14
Accounts Payable
12,800
Inventory
128
Cash
12,672
(Pay cash on account with 1% discount)
($128 = $12,800 × 1%)
August 23
Sales Revenue
(Sell inventory on account)
Cost of Goods Sold
Inventory
(Record cost of inventory sold)
Chapter 6 – Inventory and Cost of Goods Sold
Exercise 6-12 (LO 6-5)
August 6
Accounts Receivable
14,000
Sales Revenue
14,000
Cost of Goods Sold
12,600
August 10
Sales Returns
Accounts Receivable
August 14
Cash
12,672
Sales Discounts
Accounts Receivable
12,800
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
Furniture
Electronics
Requirement 2
Inventory
Quantity
Lower of Cost
and NRV
per unit
Ending
Inventory
Furniture
Electronics
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
MegaDriver
Requirement 2
Inventory
Quantity
Lower of Cost
and NRV
per unit
Ending
Inventory
Shirts
35
$ 60
$ 2,100
MegaDriver
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
Cost of goods sold
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
Purchases
3,300
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
200
Cash
(Pay freight-in cost)
May 5
Purchase Returns
(Return inventory on account)
May 10
Accounts Payable
2,900
Purchase Discounts
29
Cash
2,871
May 30
Accounts Receivable
4,000
4,000
(Sell inventory on account)
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)
July 8
Accounts Payable
Purchase Returns
(Return inventory on account)
July 13
Accounts Payable
Purchase Discounts
Cash
July 28
Accounts Receivable
Sales Revenue
114,000
(Sell inventory on account)
Requirement 2
July 31
Debit
Credit
Cost of Goods Sold
92,150
Purchase Returns
5,000
Purchase Discounts
Purchases
100,000
Exercise 6-19 (LO 6-9)
August 6
Debit
Credit
Purchases
14,000
Accounts Payable
14,000
(Purchase inventory on account)
August 7
Cash
August 10
Accounts Payable
Purchase Returns
(Return 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
Accounts Receivable
11,000
Sales Revenue
11,000
(Sell inventory on account)
Requirement 2
August 31
Debit
Credit
Inventory (ending)
2,859.50
Purchase Returns
Purchase Discounts
Purchases
14,000