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  • 111.inventory Numerical 1

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    Ismaeel raja
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    1) The document provides inventory purchase and cost data over 4 quarters with rising unit costs. COGS and ending inventory were calculated using LIFO, FIFO, and weighted average methods. 2) Under LIFO, COGS was $20,600 and ending inventory was $12,400. Under FIFO, COGS was $17,200 and ending inventory was $15,800. 3) Additional sales of $32,000 with a 40% tax rate showed that under LIFO, net profit was $6,840 compared to $8,880 under FIFO, a difference of $2,040.

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    111.Inventory Numerical 1

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    1) The document provides inventory purchase and cost data over 4 quarters with rising unit costs. COGS and ending inventory were calculated using LIFO, FIFO, and weighted average methods. 2) Under LIFO, COGS was $20,600 and ending inventory was $12,400. Under FIFO, COGS was $17,200 and ending inventory was $15,800. 3) Additional sales of $32,000 with a 40% tax rate showed that under LIFO, net profit was $6,840 compared to $8,880 under FIFO, a difference of $2,040.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    13 views3 pages

    111.inventory Numerical 1

    Uploaded by

    Ismaeel raja
    1) The document provides inventory purchase and cost data over 4 quarters with rising unit costs. COGS and ending inventory were calculated using LIFO, FIFO, and weighted average methods. 2) Under LIFO, COGS was $20,600 and ending inventory was $12,400. Under FIFO, COGS was $17,200 and ending inventory was $15,800. 3) Additional sales of $32,000 with a 40% tax rate showed that under LIFO, net profit was $6,840 compared to $8,880 under FIFO, a difference of $2,040.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 3

    Inventory Numerical

    Rising Prices Scenerio


    Quarter Purchases Units Unit Cost
    1 200 22 4400
    2 300 24 7200
    3 300 26 7800
    4 200 28 5600
    Total 1000 25000
    Beginning Inventory = 400 Units @ 20/unit = 8000
    Units sold for a total of 800 units
    Ending Inventory = 600 Units
    Requirement:
    a)      Calculate COGS and Ending Inventory using LIFO, FIFO and Weighted Average methods during Rising Prices Sc
    b)     Suppose that 800 units are sold @ 40 each unit for Rs 32,000 with a tax rate of 40% show the effect of this sal

    SOLUTION
    FIFO LIFO
    400@20 8000 200@28 5600
    200@22 4400 300@26 7800
    200@24 4800 300@24 7200
    COGS 17200 COGS 20600

    200@28 5600 200@22 4400


    300@26 7800 400 @20 8000
    100@24 2400 Ending Inv 12400
    Ending Inventory 15800
    33000 33000
    INCOME STATEMENT
    FIFO LIFO LIFO/FIFO
    Sales 32000 32000 0
    less COGS 17200 20600 3400
    Gross Profit 14800 11400 -3400
    Tax @ 40% 5920 4560 -1360
    Net Profit 8880 6840 -2040
    = 8000

    ds during Rising Prices Scenario.


    how the effect of this sale and previous COGS calculated (Rising Prises) on Income Statement, Balance Sheet and Cash Flow S

    Weighted Average COGS


    800@23.57 18857.14
    Total Puchase + Beg Inve 33000

    Total Available Units 1400 EI


    33000/1400 600@23.57 14142.86
    Weighted Average Rate 23.57143 33000

    Inventory = Purchases less COGS


    FIFO Inv 25000-17200
    LIFO Inve 25000-20600
    Cash Flow Statement
    FIFO LIFO LIFO/FIFO FIFO
    Sales 32000 32000 0 Cash 1080
    Purchase 25000 25000 0 Inventory 7800
    Cash Available 7000 7000 0 Total Assets 8880
    Tax Paid 5920 4560 -1360 Owner Equity 8880
    Cash availablefrom operation 1080 2440 1360
    lance Sheet and Cash Flow Statement.

    25000-17200 7800
    25000-20600 4400
    Balance Sheet
    LIFO LIFO/FIFO
    2440 1360
    4400 -3400
    6840 -2040
    6840 -2040
    0

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