Q37PGB_1 Right Now Electronic Center bega... [FREE SOLUTION]

Chapter 6: Q37PGB_1 (page 372)

Right Now Electronic Center began October with 100 units of merchandise inventory that cost $70 each. During October, the store made the following purchases:
Oct. 3 35 units @ $ 82 each
12 45 units @ $ 84 each
18 75 units @ $ 90 each
Right Now uses the periodic inventory system, and the physical count at October 31indicates that 130 units of merchandise inventory are on hand.
Requirements
1. Determine the ending merchandise inventory and cost of goods sold amountsfor the October financial statements using the FIFO, LIFO, and weighted-averageinventory costing methods.

Short Answer

Expert verified

	Inventory	COGS
FIFO	$11,350	$9,050
LIFO	$9,460	$10,940
Weighted Average	$10,400	$10,000

Step by step solution

Using FIFO under a periodic system

$EndingInventory=Oct18purchasevalue+Oct12purchasevalue+Oct3purchasevaluefor10units = (75 脳 $ 90) + (45 脳 $ 84) + (10 脳 $ 82) = $ 6, 750 + $ 3, 780 + $ 820 = $ 11, 350$

$Costofgoodssold=Openinginventoryvalue+TotalPurchasevalue-Endinginventoryvalue = (100 脳 $ 70) + (35 脳 $ 82 + 45 脳 $ 84 + 75 脳 $ 90) - $ 11, 350 = $ 7, 000 + $ 13, 400 - $ 11, 350 = $ 9, 050$

Using LIFO under periodic system

$EndingInventory=Openinginventoryvalue+Oct3purchasevaluefor30units = (100 脳 $ 70) + (30 脳 $ 82) = $ 7, 000 + $ 2, 460 = $ 9, 460$

$Costofgoodssold=Openinginventoryvalue+TotalPurchasevalue-Endinginventoryvalue = (100 脳 $ 70) + (35 脳 $ 82 + 45 脳 $ 84 + 75 脳 $ 90) - $ 9, 460 = $ 7, 000 + $ 13, 400 - $ 9, 460 = $ 10, 940$

Using weighted average under periodic system

$AvreageCost= \frac{O p e n i n g i n v e n t o r y v a l u e + T o t a l P u r c h a s e v a l u e}{T o t a l u n i t s f o r s a l e} = \frac{(100 脳 $ 70) + (35 脳 $ 82 + 45 脳 $ 84 + 75 脳 $ 90)}{100 + 35 + 45 + 75} = \frac{$ 7, 000 + $ 13, 400}{255} = $ 80$

$贰苍诲颈苍驳滨苍惫别苍迟辞谤测=贰苍诲颈苍驳鲍苍颈迟蝉脳础惫别谤补驳别肠辞蝉迟 =130脳$80 =$10,400$

$Costofgoodssold=Openinginventoryvalue+TotalPurchasevalue-Endinginventoryvalue = (100 脳 $ 70) + (35 脳 $ 82 + 45 脳 $ 84 + 75 脳 $ 90) - $ 10, 400 = $ 7, 000 + $ 13, 400 - $ 10, 400 = $ 10, 000$

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	2019	2018	2017
Net Sales Revenue	\( 220,000	\) 162,000	\( 176,000
Cost of Goods Sold:
Beginning Merchandise Inventory	\)22,000	\(29,000	\)46,000
Net cost of purchase	132,000	90,000	76,000
Cost of goods available for sale	154,000	119,000	122,000
Less: Ending Merchandise Inventory	32,000	22,000	29,000
Cost of goods sold	122,000	97,000	93,000
Gross Profit	98,000	65,000	83,000
Operating Expenses	72,000	38,000	48,000
Net Income	\( 26,000	\) 27,000	$ 35,000

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Short Answer

Step by step solution

Using FIFO under a periodic system

Using LIFO under periodic system

Using weighted average under periodic system

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