1.

Cost of goods available for sale and number of units available for sale

Total
Unit purchase Total sale
Date Activities acquired Cost cost Unit sold Price price
1, March Beginning in 50 50 2,500
5, March Purchase 200 55 11,000

9, March Sales 210 85 17,850

18, March Purchase 60 60 3,600
25, March Purchase 100 62 6,200
29, March Sales 80 95 7,600

Cost of goods available f 23,300

Number of units available 410

2. Compute number of unit in ending inventory

Number of units in endin 120 70

3. Compute cost assigned to ending inventory

a. FIFO
Way 1:

Goods Inventory
Date purchased COGS balance
1, March 2,500
5, March 11,000 13,500
9, March 11,300 2,200
18, March 3,600 5,800
25, March 6,200 12,000
29, March 4,600 7,400
15,900

Way 2:
Total cost available for sales 23,300
Less : COGS 50 @ 50 2,500
200 @ 55 11,000
40 @ 60 2,400
7,400

Inventory balance 15,900

b. LIFO
Way 1:

Goods Inventory
Date purchased COGS balance
1, March 2,500
5, March 11,000 13,500
9, March 11,500 2,000
18, March 3,600 5,600
25, March 6,200 11,800
29, March 4,960 6,840
16,460

Way 2:
Total cost available for sales 23,300
Less : COGS 10@50 500
200@55 11,000
80@62 4,960
6,840

Inventory balance 16,460

c. Specific identification
Ending inventory include40 units from beginning inventory
170 unites from the March 5
20 units from the March 18
60 units from the March 25

Inventory balance 16,270

COGS 7,030

d. Weighted average
Way 1:

Units Average
Goods Inventory available cost per
Date purchased COGS balance for sale unit
1, March 2,500 50
5, March 11,000 13,500 250 54
9, March 11,340 2,160 40
18, March 3,600 5,760 100
25, March 6,200 11,960 200 59.8
29, March 4,784
16,124
4. Compute gross profit

Specific
identificati Weighted
FIFO LIFO on average
Sales 25,450 25,450 25,450 25,450
COGS 15,900 16,460 16,270 16,124
Gross profit 9,550 8,990 9,180 9,326
1. Cost of goods available for sale and number of units available for sale

Total
Unit purchase Total sale
Date Activities acquired Cost cost Unit sold Price price
1-Jan Beginning in 600 44 26,400
10-Feb Purchase 200 40 8,000
13-Mar Purchase 100 20 2,000
15-Mar Sales 400 75 30,000
21-Aug Purchase 160 60 9,600
5-Sep Purchase 280 48 13,440
10-Sep Sales 200 75 15,000

Cost of goods available f 59,440

Number of units available 1,340

2. Compute number of unit in ending inventory

Number of units in endin 740 140

3. Compute cost assigned to ending inventory

a. FIFO
Way 1:

Goods Inventory
Date purchased COGS balance
1-Jan 26,400
10-Feb 8,000 34,400
13-Mar 2,000 36,400
15-Mar 17,600 18,800
21-Aug 9,600 28,400
5-Sep 13,440 41,840
10-Sep 8,800
26,400 33,040

Way 2:
Total cost available for sales 59,440
Less : COGS 400 @ 44 17600
200 @ 44 8800
33,040
Inventory balance 26,400

b. LIFO
Way 1:

Goods Inventory
Date purchased COGS balance
1-Jan 26,400
10-Feb 8,000 34,400
13-Mar 2,000 36,400
15-Mar 14,400 22,000
21-Aug 9,600 31,600
5-Sep 13,440 45,040
10-Sep 9,600 35,440
24,000

Way 2:
Total cost available for sales 59,440
Less : COGS 100 @ 20 2,000
200 @ 40 8,000
100 @ 44 4,400
200 @ 48 9,600
35,440
Inventory balance 24,000

c. Specific identification
Ending inventory include500 units from beginning inventory
100 units from the March 13

Inventory balance 24,000

COGS 35,440

d. Weighted average
Way 1:

Units Average
Goods Inventory available cost per
Date purchased COGS balance for sale unit
1-Jan 26,400 600
10-Feb 8,000 34,400 800
13-Mar 2,000 36,400 900 40.44
15-Mar 16,178 20,222 500
21-Aug 9,600 29,822 660
5-Sep 13,440 43,262 940 46.02
10-Sep 9,205 34,057 740
25,383
4. Compute gross profit

Specific
identificati Weighted
FIFO LIFO on average
Sales 45,000 45,000 45,000 45,000
COGS 26,400 24,000 24,000 25,383
Gross profit 18,600 21,000 21,000 19,617
Inventory Items Units Cost Market Total cost Total market LCM applied to items
Audio equipment
Receivers 335 90 98 30150 32830 30150
CD players 250 111 100 27750 25000 25000
MP3 player 316 86 95 27176 30020 27176
Speakers 194 52 41 10088 7954 7954
Video equipment
Handheld 470 150 125 70500 58750 58750
VCRs 281 93 84 26133 23604 23604
Camcorder 202 310 322 62620 65044 62620
Car audio equipment
Satellite ra 175 70 84 12250 14700 12250
CD/MP3 ra 160 97 105 15520 16800 15520
Totals 282187 263024
Errors: Inventory on Dec 31, 2008 is understa 50,000
Inventory on Dec 31, 2009 is overstat 20,000

1. Adjustments to correct the reported amount

a. COGS
COGS 2008 2009 2010
Reported amount 725,000 955,000 790,000
Adjustments for error:
31-Dec-08 (50,000) 50,000
31-Dec-09 20,000 (20,000)
Corrected amount 675,000 1,025,000 770,000

b. Net income
Net income 2008 2009 2010
Reported amount 268,000 275,000 250,000
Adjustments for error:
31-Dec-08 50,000 (50,000)
31-Dec-09 (20,000) 20,000
Corrected amount 318,000 205,000 270,000

c. Total current assets

Total current assets 2008 2009 2010
Reported amount 1,247,000 1,360,000 1,230,000
Adjustments for error:
31-Dec-08 50,000
31-Dec-09 (20,000)
Corrected amount 1,297,000 1,340,000 1,230,000

d. Equity
Total equity 2008 2009 2010
Reported amount 1,387,000 1,580,000 1,245,000
Adjustments for error:
31-Dec-08 50,000
31-Dec-09 (20,000)
Corrected amount 1,437,000 1,560,000 1,245,000
 Total
Unit purchase Total sale
Date Activities acquired Cost cost Unit sold Price price
1-Jan Beginning In 20,000 15 300,000
7-Mar Purchase 28,000 18 504,000
25-May Purchase 30,000 22 660,000
1-Aug Purchase 20,000 24 480,000
10-Nov Purchase 33,000 27 891,000
Total 131,000 2,835,000

a. FIFO Ending Inve 939000

Cost of Go 1896000
b. LIFO Ending Inve 570000
Cost of Go 2265000
c. WA Ending Inve757442.7
Cost of Go 2077557
1. Cost of goods available for sale and number of units available for sale

Total
Unit purchase Total sale
Date Activities acquired Cost cost Unit sold Price price
1-Apr Beginning In 15 3,000 45,000
6-Apr Purchase 35 3,500 122,500
9-Apr Sales 18 12,000 216,000
17-Apr Purchase 8 4,500 36,000
25-Apr Purchase 10 4,580 45,800
30-Apr Sales 30 14,000 420,000

Cost of goods available f 249,300

Number of units available 68

2. Compute number of unit in ending inventory

Number of units in endin 20 5

3. Compute cost assigned to ending inventory

a. FIFO
Way 1:

Goods Inventory
Date purchased COGS balance
1-Apr 45,000
6-Apr 122,500 167,500
9-Apr 55,500 112,000
17-Apr 36,000 148,000
25-Apr 45,800 193,800
30-Apr 105,000 88,800
160,500

Way 2:
Total cost available for sales 249,300
Less : COGS 15 @ 3,000 45,000
33 @ 3,500 115,500

160,500

Inventory balance 88,800

b. LIFO
Way 1:

Goods Inventory
Date purchased COGS balance
1-Apr 45,000
6-Apr 122,500 167,500
9-Apr 63,000 104,500
17-Apr 36,000 140,500
25-Apr 45,800 186,300
30-Apr 123,800 62,500
186,800

Way 2:
Total cost available for sales 249,300
Less : COGS 30 @ 3,500 105,000
8 @4,500 36,000
10 @ 4,580 45,800
62,500

Inventory balance 186,800

c. Specific identification
Ending inventory include8 units from beginning inventory
10 units from the April 6 purchase
20 units from the April 30
10 units from the April 25 purchase

Inventory balance 174,800

COGS 74,500

d. Weighted average
Way 1:

Units Average
Goods Inventory available cost per
Date purchased COGS balance for sale unit
1-Apr 45,000 15
6-Apr 122,500 167,500 50 3350
9-Apr 60,300 107,200 32
17-Apr 36,000 143,200 92
25-Apr 45,800 189,000 192 984.375
30-Apr 113,400
173,700
4. Compute gross profit

Specific
identificati Weighted
FIFO LIFO on average
Sales 636,000 636,000 636,000 636,000
COGS 160,500 186,800 174,800 173,700
Gross profit 475,500 449,200 461,200 462,300