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  • ABANILLA, LORRAINE JOY M. - INTACC & 075 - Activity 3 (A03) - Inventory Cost Flow Methods 3.0

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    1. Bronze Company had inventory transactions in January involving beginning inventory, purchases, and sales under the FIFO and weighted average cost methods. 2. Under the FIFO method, the ending inventory cost was $3.2 million and the cost of goods sold was $5.2 million. 3. Under the weighted average method, the ending inventory cost was $4.1 million and the cost of goods sold was $7.3 million.

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    ABANILLA, LORRAINE JOY M._INTACC & 075_ Activity 3 (A03) - Inventory Cost Flow Methods 3.0

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    1. Bronze Company had inventory transactions in January involving beginning inventory, purchases, and sales under the FIFO and weighted average cost methods. 2. Under the FIFO method, the ending inventory cost was $3.2 million and the cost of goods sold was $5.2 million. 3. Under the weighted average method, the ending inventory cost was $4.1 million and the cost of goods sold was $7.3 million.

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    8 views3 pages

    ABANILLA, LORRAINE JOY M. - INTACC & 075 - Activity 3 (A03) - Inventory Cost Flow Methods 3.0

    Uploaded by

    Lorraine Joy Abanilla
    1. Bronze Company had inventory transactions in January involving beginning inventory, purchases, and sales under the FIFO and weighted average cost methods. 2. Under the FIFO method, the ending inventory cost was $3.2 million and the cost of goods sold was $5.2 million. 3. Under the weighted average method, the ending inventory cost was $4.1 million and the cost of goods sold was $7.3 million.

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    of 3

    NAME: Lorraine Joy M.

    Abanilla BSA-1 SECTION CODE: 075


    PROFESSOR: Mr. Remi Gabon SUBJECT: INTACC-1

    Activity 3 (A03) - Inventory Cost Flow Methods 3.0

    Problem 1

    BRONZE Company had the following transactions relating to inventory


    during January:

    Requirements: (4 points)
    Compute the following:

    1. Cost of ending inventories


    2. Cost of goods sold

    Assumption 1: Using the first-in, first out method


    Assumption 2: Using the weighted average-periodic method
    ASSUMPTION 1 (FIFO METHOD)

    UNIT UNIT COST

    Jan-01 Balance on hand ₱ 12,000 ₱ 300

    Jan-05 Purchase 4,000 400

    Balance 16,000

    Jan-10 Sale (8,000) (8,000 units @ ₱ 300)

    Balance 8,000 (4,000 units @ ₱ 300 | 4,000 units @ ₱ 400)

    Jan-15 Sales (2,000) (2,000 units @ ₱ 300)

    Balance 6,000 (2,000 units @ ₱ 300 | 4,000 units @ ₱ 400)

    Jan-20 Purchase 5,000 600

    Balance 11,000 (2,000 units @ ₱ 300 | 4,000 units @ ₱ 400)

    Jan-25 Purchase 4,000 800

    Balance 15,000 (2,000 units @ ₱ 300 | 4,000 units @ ₱ 400)

    Jan-31 Sale (6,000) (2,000 units @ ₱ 300 | 4,000 units @ ₱ 400)

    Balance ₱ 9,000 (5,000 units @ ₱ 600 | 4,000 units @ ₱ 800)

    REQUIREMENT 1

    UNIT TOTAL
    UNIT
    COST COST
    From January 20 purchase ₱ 5,000 ₱ 600 ₱ -
    From January 25 purchase 4,000 800 3,200,000
    Ending inventory (FIFO) ₱ 9,000.00 ₱ 3,200,000
    REQUIREMENT 2

    Beginning inventories (12,000 units x P300) ₱ 3,600,000


    Add: January 05 purchase (4,000 units x P400) 1,600,000
    Add: January 20 purchase ( 5,000 units x P600) 3,000,000
    Add: January 25 purchase (4,000 units x P800) 3,200,000
    Total cost available for sale ₱ 11,400,000
    Less: Ending inventories (FIFO) 6,200,000
    Cost of goods sold ₱ 5,200,000

    ASSUMPTION 2:

    WEIGHTED AVERAGE
    PERIODIC METHOD

    REQUIREMENT 1

    Beginning inventories (12,000 units x P300) ₱ 3,600,000


    Add: January 05 purchase (4,000 units x P400) 1,600,000
    Add: January 20 purchase ( 5,000 units x P600) 3,000,000
    Add: January 25 purchase (4,000 units x P800) 3,200,000
    Total cost available for sale ₱ 11,400,000
    Divided by: Total units available for sale
    25,000
    (12,000+4,000+5,000+4,000)
    Weighted average unit cost ₱ 456

    Ending inventories in units 9,000


    Multiplied by: Weighted average cost ₱ 456
    Ending inventories (weighted average-periodic) ₱ 4,104,000

    REQUIREMENT 2

    Total cost available for sale ₱ 11,400,000


    Less: Ending inventories (weighted average-periodic) 4,104,000
    Cost of goods sold (weighted average-periodic) ₱ 7,296,000

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