CHAPTER 7 Inventories
Appendix Ex. 7–22
$666,900 ($1,235,000 × 54%)
Appendix Ex. 7–23
$241,804 ($396,400 × 61%)
Appendix Ex. 7–24
$511,500 ($775,000 × 66%)
Appendix Ex. 7–25
Cost Retail
Merchandise inventory, June 1 $ 165,000 $ 275,000
Appendix Ex. 7–26
a. Merchandise inventory, January 1 $ 350,000
b. The gross profit method is useful for estimating inventories for monthly or
CHAPTER 7 Inventories
Appendix Ex. 7–27
CHAPTER 7 Inventories
Prob. 7–1A
1.
Unit Total Unit Total Unit Total
Quantity Cost Cost Quantity Cost Cost Quantity Cost Cost
June 1 500 30.00 15,000
1,500 34.00 51,000
28 500 30.00 15,000
250 34.00 8,500 1,250 34.00 42,500
30 250 34.00 8,500 1,000 34.00 34,000
900 35.00 31,500 2,700 35.00 94,500
28 1,700 35.00 59,500 1,000 35.00 35,000
500 36.00 18,000
31 Balances 290,450 26,950
PROBLEMS
2014
Date
Purchases Cost of Merchandise Sold Inventory
CHAPTER 7 Inventories
Prob. 7–1A (Concluded)
2. Accounts Receivable 483,800
Sales 483,800
5. Since the prices rose from $30 for the June 1 inventory to $36 for the purchase
*
CHAPTER 7 Inventories
Prob. 7–2A
1.
Unit Total Unit Total Unit Total
750 34.00 25,500
30 250 34.00 8,500 500 30.00 15,000
400 34.00 13,600
10 3,600 35.00 126,000 500 30.00 15,000
400 34.00 13,600
400 34.00 13,600
100 35.00 3,500
Aug. 5 3,000 35.80 107,400 500 30.00 15,000
100 35.00 3,500
400 34.00 13,600
100 35.00 3,500
100 35.00 3,500
1,000 35.80 35,800
500 36.00 18,000
150 34.00 5,100
31 Balances 293,900 23,500
Cost of Merchandise Sold Inventory
Purchases
CHAPTER 7 Inventories
Prob. 7–2A (Concluded)
2. Total sales…………………………………………………………………………… $483,800
*
CHAPTER 7 Inventories
Prob. 7–3A
1.
Unit Total Total Total
Quantity Cost Cost Quantity Unit Cost Cost Quantity Unit Cost Cost
June 1 500 30.00 15,000
2. Total sales…………………………………………………………
…
$483,800
Cost of Merchandise Sold Inventory
Date
Purchases
*
CHAPTER 7 Inventories
Prob. 7–4A
1. First-In, First-Out Method
Merchandise inventory, August 31, 2014………………………………
…
$ 26,950
Cost of merchandise sold…………………………………………………
…
290,450
Supporting computations
2. Last-In, First-Out Method
Merchandise inventory, August 31, 2014………………………………
…
$ 23,500
Cost of merchandise sold…………………………………………………
…
293,900
Supporting computations
…
…
CHAPTER 7 Inventories
Prob. 7–4A (Continued)
3. Weighted Average Cost Method
Merchandise inventory, August 31, 2014………………… $ 26,160
Cost of merchandise sold…………………………………
…
291,240
Supporting computations
…
…
CHAPTER 7 Inventories
Prob. 7–4A (Concluded)
4. Weighted
FIFO LIFO Average
CHAPTER 7 Inventories
Prob. 7–5A
1. First-In, First-Out Method
Model Quantity Unit Cost Total Cost
A10 4 $ 76 $ 304
2 70 140
2. Last-In, First-Out Method
Model Quantity Unit Cost Total Cost
A10 4 $ 64 $ 256
2 70 140
CHAPTER 7 Inventories
Prob. 7–5A (Concluded)
3. Weighted Average Cost Method
Quantity Unit Cost*Total Cost
6 $ 70 $ 420
8 174 1,392
4. a. During periods of rising prices, the LIFO method will result in a lower cost
of inventory, a greater amount of cost of merchandise sold, and a lesser
Model
A10
B15
CHAPTER 7 Inventories
Prob. 7–6A
Unit Unit
Cost Market Lower of
Description Price Price Cost Market C or M
B12 38 30 $ 60 $ 57 $ 1,800 $ 1,710
10,110 9,900 9,900
N94 400 8 7 3,200 2,800 2,800
P24 90 80 22 18 1,760 1,440
Quantity
Inventory Sheet
December 31, 2014
Inventory
Total
CHAPTER 7 Inventories
Appendix Prob. 7–7A
1.
Cost Retail
Merchandise inventory, August 1 $ 300,000 $ 575,000
2.
Cost
a. Merchandise inventory, March 1 $ 880,000
CELEBRITY TAN CO.
RANCHWORKS CO.
CHAPTER 7 Inventories
Prob. 7–1B
1.
Unit Total Unit Total Unit Total
Quantity Cost Cost Quantity Cost Cost Quantity Cost Cost
Apr. 3 25 1,200 30,000
Cost of Merchandise Sold Inventory
Date
Purchases
CHAPTER 7 Inventories
Prob. 7–1B (Concluded)
2. Accounts Receivable 525,250
Sales 525,250
5. Since the prices rose from $1,200 for the April 3 inventory to $1,264 for the purchase
*
CHAPTER 7 Inventories
Prob. 7–2B
1.
Unit Total Unit Total Unit Total
Quantity Cost Cost Quantity Cost Cost Quantity Cost Cost
Apr. 3 25 1,200 30,000
8 75 1,240 93,000 25 1,200 30,000
10 1,260 12,600
19 10 1,260 12,600
5 1,240 6,200
5 1,200 6,000 20 1,200 24,000
28 80 1,260 100,800 20 1,200 24,000
Cost of Merchandise Sold Inventory
Date
Purchases