Problem 4 Multiple Choice

Computational
1. B
Unadjusted balance 260,000
a 11,000
b 5,000
c (16,000)
d 20,000
e (4,000)
Correct Inventory 276,000

2. C
3. D
Goods in Warehouse
Beginning Inventory 110,000
Purchases 480,000
Freight in 10,000
Transportation to consignees
Total Goods Available for Sale 600,000
Ending Inventory (145,000)
Cost of Good Sold 455,000

4. D
Markup on unsold consigned 16,000
Goods held on consignment by Opal 27,000
Total reduction in inventory 43,000

5. C
Net Method Gross Method
80,000 80,000
100,000 MultiplY by: 98%
Multiply by: 98% 100,000
176,400 178,400

6. C
Inventory Accounts Payable
380,000 372,400
Multiply by: 98% 7,600
372,400 380,000

7. A
Ending Inventory Cost of Goods Sold
200,000.00 200,000
Multiply by 98% Multiply by 98%
Multiply by 10% Multiply by 90%
19,600 176,400

8. C
Allocated only to the goods sold
Gross amounts
Ending Inventory 20,000
Cost of goods sold 180,000
Total 200,000

Allocated only to both EI and COGS

Gross amounts
Ending Inventory 20,000
Cost of goods sold 180,000
Total 200,000

9. D
FIFO periodic
Beginning Inventory in units 1,400
Net purchases in units 1,500
Total Goods Available for Sale in units 2,900
Quantity of goods sold (1,900)
Ending Inventory in units 1,000

Quantity
Ending inventory to be allocated 1,000
Allocation to June 24 purchase (700)
Excess allocated to June 14 300
Ending inventory at cost

Total goods available for sale 82,600

Ending inventory at cost (31,500)
Cost of goods sold 51,100

FIFO perpetual
Date Transaction
1-Jun Balance forwarded
8 Sale
14 Purchase
18 Sale
24 Purchase
29 Sale
Ending Inventory
Cost of goods sold
9,600
21,600
2,400
17,500
51,100

10. A
Weighted average periodic
Weighted average unit cost 28.48

Ending Inventory in units 1,000

Multiply by: Weighted average unit cost 28.48
Ending inventory at cost 28,480

Total goods available for sale 82,600

Ending inventory at cost (28,480)
Cost of goods sold 54,120

Weighted average perpetual

Date Transaction
1-Jun Balance forwarded
8 Purchase
14 Sale
Totals
18 Sale
24 Purchase
Totals
29 Sale
Ending inventory in units and cost
Cost of goods sold
9,600
26,001
17,622
53,223
 Goods held by consignees
12,000
60,000

5,000
77,000
(20,000)
55,000.00 512,000

initial measurement
Allocation of discount Net amounts
- 20,000
3,200 176,800
3,200

Allocation of discount Net amounts

320 19,680
2,880 177,120
3,200

Unit cost Total cost

30 21,000
35 10,500
31,500

Quantity Unit cost Tota cost

1,400 24 33,600
400 24 (9,600)
800 35 28,000
900 24 (21,600)
700 30 21,000
600
100 from June 1 21 (2,400)
500 from June 14 35 (17,500)
 31,500

(82,600/2,900)

Quantity Unit cost Total cost

1,400 24 33,600
(400) 24 (9,600)
800 35 28,000
1,800 29 52,000
(900) 24 (26,001)
700 30 21,000
1,600 29 46,999
(600) (17,622)
1,000 29,377
11. C
FIFO Periodic
Beginning inventory in units 2,000
Net purchases in units 9,400
Total goods available for sale in units 11,400

Total goods available for sale in units 11,400

Quantity of goods sold (7,400)
Ending inventory in units 4,000

Units
Ending inventory to be allocated 4,000
Allocated as follows:
From Nov. 29 net purchases (1,600)
Bal. to be allocated to the next most 2,400
recent purchase date
From Nov. 21 purchase (2,400)
Ending inventory at cost -

Total goods available for sale 427,760

Ending inventory at cost (152,960)
Cost of goods sold 274,800

FIFO Perpetual
Date Transaction
Nov. 1 Inventory
7 Purchase
12 Net Sales
Allocation:
from beg. Inventory
from Nov. 7 purchase
15 Purchase
22 Sales
Allocation:
from Nov. 7 purchase (bal.)
from Nov. 15 purchase
29 Net Purchases
Ending inventory at cost

Cost of goods sold

72,000
59,520
 52,080
91,200
274,800

12. A
Weighted Average - Periodic
Weighted average unit cost 37.52

Ending inventory in units 4,000

Multiply by: Weighted average unit cost 37.52
Ending inventory at cost 150,080

Total goods available for sale 427,760

Ending inventory at cost (150,080)
Cost of goods sold 277,680

Weighted Average - Perpetual

Date Transactions
Nov. 1 Inventory
7 Purchase
Moving average unit cost
(183,600/5,000)
12 Sales
Sales returns
15 Purchase
Moving average unit cost
(233,808/6,200)
22 Sales
29 Purchase
30 Purchase returns
Ending inventory in units and at cost
Cost of goods sold
154,244
22,032
143,298
275,490

13. B
Total goods available for sale
(195,000 + 65,000)
FIFO ending inventory
FIFO cost of goods sold

14. A
Invoice price inclusive of VAT
VAT
Shipping cost
Transit insurance
Commission to broker
Cost of inventory

15. C
Sales
Sales discount
Sales returns
Net sales
Cost of goods sold:
Beginning inventory
Purchases
Purchase returns
Purchase discounts
Freight in
Total goods available for sale
Ending inventory
Gross profit

16. C

Cost (50+5); (30+4); (109+68)

NRV (56-4); (60-8); (250-75)
Lower
No. of units
Total

17. D - Raw materials are not written-down

18. B - The recovery in 20x2 of 40,000 exceeds the previous write-down of 30,000
19. B

Beginning inventory
Net purchases, excluding freight-in
Freight-in (squeeze)

Total goods available for sale

510,000
75,000
585,000
20. A

Beginning inventory
Purchases
Freight-in
Unit cost Total cost

39 61,760

38 91,200
152,960

Units Unit cost Total cost

2,000 36 72,000
3,000 37 111,600
3,600

(2,000) 36 (72,000)
(1,600) 37 (59,520)
4,800 38 182,400
3,800

(1,400) 37 (52,080)
(2,400) 38 (91,200)
1,600 39 61,760
152,960
Units Unit cost Total cost
2,000 36 72,000
3,000 37.20 111,600
5,000 36.72 183,600

(4,200) 36.72 (154,224)

600 36.72 22,032
4,800 38 182,400
6,200 37.71

(3,800) 37.71 (143,298)

1,900 38.60 73,340
(300) 38.60 (11,580)
4,000 152,270

260,000

(65,000)
195,000
 112,000
(12,000)
40,000
12,000
5,600
157,600

1,000,000
(50,000)
(10,000)
940,000

60,000
500,000
25,000
10,000
60,000
585,000
(75,000) (510,000)
430,000

X Y Z
55 34 177
52 52 175
52 34 175
3,700 2,500 1,300
192,400 85,000 227,500

xceeds the previous write-down of 30,000

Inventory
60,000
465,000
60,000
510,000 COGS
75,000 Ending inventory
 Inventory
$ 60,000.00
$ 500,000.00 $ 25,000.00 Purchase returns
$ 60,000.00 $ 10,000.00 Purchase discounts
$ 510,000.00 COGS
$ 75,000.00 Ending inventory
Total

504,900