Accounting Principles by Kieso

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					          Name: Key                                               Date:
      Instructor:                                              Course:
Accounting Principles, Eighth Edition by Weygandt, Kieso, and Kimmel
Solving Accounting Principles Problems Using Microsoft Excel
                          for Windows by Rex A Schildhouse
P6-2A Glanville Distribution markets CDs of the performing artist Harrilyn Clooney. At the beginning of March,
Glanville had in beginning inventory              1,500      Clooney CDs with a unit cost of
During March Glanville made the following purchases of Clooney CDs:
               Date:     Quantity:    Cost:                    Date:      Quantity:    Cost:
               Mar 5      3,000        $8                     Mar 21       4,000        $10
              Mar 13      5,500        $9                     Mar 26       2,000        $11

During March             12,500    units were sold. Glanville uses a periodic inventory system.

Instructions:
(a) Determine the cost of goods available for sale.

                             COST OF GOODS AVAILABLE FOR SALE
                       Date    Explanation Units     Unit Cost Total Cost
                         Mar 1 Inv 10/01       1,500        $7 $10,500
                         Mar 5 Purchase        3,000         8 $24,000
                        Mar 13 Purchase        5,500         9 $49,500
                        Mar 21 Purchase        4,000        10 $40,000
                        Mar 26 Purchase        2,000        11 $22,000
                         Total               16,000            $146,000

(b) Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost
flow methods (FIFO, LIFO, and average cost). Prove the accuracy of the cost of goods sold under the

 FIFO
   (1)     Ending Inventory
  Date       Units    Unit Cost     Total Cost
 Mar 26       1,500         $11       $16,500
 Mar 21       2,000          10       $20,000
              3,500                   $36,500

Ending inventory = 16,000 available for sale - 12,500 CDs sold = 3,500 CDs

Proof of Cost of Goods Sold
Date       Units       Unit Cost Total Cost
  Mar 1          1,500        $7     $10,500
  Mar 5          3,000         8     $24,000
  Mar 13         5,500         9     $49,500
  Mar 21         2,500        10     $25,000
               12,500               $109,000

 LIFO
   (1)     Ending Inventory
  Date       Units    Unit Cost     Total Cost
    Mar 1        1,500         $7      $10,500
    Mar 5        2,000          8      $16,000
                3,500                  $26,500

Proof of Cost of Goods Sold
Date       Units      Unit Cost Total Cost
  Mar 26        2,000       $11     $22,000
  Mar 21        4,000        10     $40,000
  Mar 13        5,500         9     $49,500
  Mar 5         1,000         8       $8,000
              12,500               $119,500

 AVERAGE COST
  (1)  Ending Inventory

$                                     31,937.50

    Units    Unit cost: Total cost:
    12,500   $ 9.13 $114,063

(c) Which cost flow method results in (1) the highest inventory amount for the balance sheet and (2) the
highest cost of goods sold for the income statement?
  (1)
LIFO



  (2)
FIFO
. At the beginning of March,
                 $7




ory system.




of the assumed cost
oods sold under the
ance sheet and (2) the
                 Name:                                                                     Date:
             Instructor:                                                                 Course:
Accounting Principles, Eighth Edition by Weygandt, Kieso, and Kimmel
Solving Accounting Principles Problems Using Microsoft Excel
                         for Windows by Rex A Schildhouse
P6-2A Glanville Distribution markets CDs of the performing artist Harrilyn Clooney. At the beginning of March,
Glanville had in beginning inventory                       1,500              Clooney CDs with a unit cost of      $7
During March Glanville made the following purchases of Clooney CDs:
                 Date:        Quantity:      Cost:                           Date:       Quantity:       Cost:
                 Mar 5         3,000          $8                            Mar 21         4,000         $10
                 Mar 13        5,500          $9                            Mar 26         2,000         $11

During March                  12,500     units were sold. Glanville uses a periodic inventory system.

Instructions:
(a) Determine the cost of goods available for sale.

                                          COST OF GOODS AVAILABLE FOR SALE
                            Date         Explanation Units      Unit Cost  Total Cost
                               Mar 1     Inv 10/01
                               Mar 5     Purchase
                              Mar 13     Purchase
                              Mar 21     Purchase
                              Mar 26     Purchase
                               Total

(b) Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO,
LIFO, and average cost). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods.

  FIFO
    (1)    Ending Inventory
   Date        Units        Unit Cost      Total Cost
  Mar 26
  Mar 21


Ending inventory = 0 available for sale - 12,500 CDs sold = -12,500 CDs

Proof of Cost of Goods Sold
Date       Units           Unit Cost     Total Cost
  Mar 1
  Mar 5
  Mar 13
  Mar 21




      FileName: 51faf916-9897-4d88-a334-3dc30a353f6c.xls, Tab: Problem P6-2A, Page 5 of 7, 12/4/2010, 2:22 PM
                Name:                                                               Date:
            Instructor:                                                           Course:
 LIFO
Accounting Principles, Eighth Edition by Weygandt, Kieso, and Kimmel
   (1)     Ending Inventory
  Date         Units        Unit Cost    Total Cost
  Mar 1
  Mar 5


Proof of Cost of Goods Sold
Date       Units           Unit Cost    Total Cost
  Mar 26
  Mar 21
  Mar 13
  Mar 5




      FileName: 51faf916-9897-4d88-a334-3dc30a353f6c.xls, Tab: Problem P6-2A, Page 6 of 7, 12/4/2010, 2:22 PM
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