12BP At the end of January, Higgins D... [FREE SOLUTION]

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Foundations Of Financial Management

Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen

Business Studies

16th Edition 路 768 pages

ISBN: 9781259277160

Chapter 2: 12BP (page 115)

At the end of January, Higgins Data Systems had an inventory of 650 units, which cost $16 per unit to produce. During February the company produced 950 units at a cost of $19 per unit. If the firm sold 1,150 units in February, what was its cost of goods sold (assume LIFO inventory accounting)?

Short Answer

Expert verified

The cost of goods sold of the company assuming LIFO inventory accounting method is $21,250.

Step by step solution

Ending inventory in units

$\begin{array}{rcl} Ending inventory & = & Beginning inventory + Units produced - Sales units \\ = & 650 + 950 - 1, 150 \\ = & 450 \end{array}$

Cost of goods sold assuming LIFO inventory accounting method

$\begin{array}{rcl} Cost of goods sold & = & (Beginning units 脳 Unit price) + (Units produced 脳 Unit price) - (Ending units 脳 Beginning unit price) \\ = & (650 脳 $ 16) + (950 脳 $ 19) - (450 脳 $ 16) \\ = & $ 21, 250 \end{array}$

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Taxes	Earning per share
Share Outstanding	Earning before taxes
Interest Expense	Cost of goods sold
Depreciation Expense	Earning after taxes
Preferred Stcok dividends	Earning available to common stockholders
Sales	Selling and administrative expense
Gross profit

	Capable corporation	Muli-media inc
Net income	\(31,200	\)140,000
Sales	317,000	2,700,000
Total assets	402,000	965,000
Total debts	163,000	542,000
Stockholder鈥檚 equity	239,000	423,000

Times mirror and glass company
Sales	\)126,000
Less: Cost of goods sold	93,000
Gross profit	\(33,000
Less: selling and administrative expenses	11,000
Lease Expenses	4,000
Operating profit*	\)18,000
Less: Interest expenses	3,000
Earning before taxes	\(15,000
Less: Taxes (30%)	4,500
Earning after taxes	\)10,500

91影视

At the end of January, Higgins Data Systems had an inventory of 650 units, which cost \(16 per unit to produce. During February the company produced 950 units at a cost of \)19 per unit. If the firm sold 1,150 units in February, what was its cost of goods sold (assume LIFO inventory accounting)?

Short Answer

Step by step solution

Ending inventory in units

Cost of goods sold assuming LIFO inventory accounting method

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