70.2K

Verified Solution

Link Copied!

Problem P6-2A - Determine cost of goods sold and ending inventory using FIFO, LIFO, and average-cost with analysis.
										Financial and Managerial Accounting by Weygandt, Kieso, and Kimmel
Primer on Using Microsoft Excel in Accounting by Rex A Schildhouse
Problem P6-2A, Dyna Distribution markets CDs of the performing artist King James. At the beginning of March, Dyna
had in beginning inventory			1,500	King James CDs with a unit cost of			$7.00	During March Dyna
made the following purchases of King James CDs.
			Mar 5	3,500	units at	$8.00
			Mar 13	4,000	units at	9.00
			Mar 21	2,000	units at	10.00
			Mar 26	2,000	units at	11.00
During March		10,000	units were sold. Dyna uses a periodic inventory system.
Instructions:
(a) Determine the cost of goods available for sale.
		Date:	Quantity		Unit Cost:	Extended Cost:
		Mar 1	Quantity	units at	Amount	Formula
		5	Quantity	units at	Amount	Formula
		13	Quantity	units at	Amount	Formula
		21	Quantity	units at	Amount	Formula
		26	Quantity	units at	Amount	Formula
		Quantity:	Formula	Cost of goods available:		Formula
(b)(1) Determine the ending inventory and cost of goods sold under the First-in, First-out cost flow method. Prove the accuracy of the cost of goods sold.
	Ending Inventory					Cost of Goods Sold
	Date	Units	Unit Cost	Total Cost		Cost of goods available for sale		Formula
	Date	Quantity	Amount	Formula		Title		Formula
	Date	Quantity	Amount	Formula		Title		Formula
		Formula		Formula
			Proof of Cost of Goods Sold
			Date	Units	Unit Cost	Total Cost
			Date	Quantity	Amount	Formula
			Date	Quantity	Amount	Formula
			Date	Quantity	Amount	Formula
			Date	Quantity	Amount	Formula
				Formula		Formula
(b)(2) Determine the ending inventory and cost of goods sold under the Last-in, First-out cost flow method. Prove the accuracy of the cost of goods sold.
	Ending Inventory					Cost of Goods Sold
	Date	Units	Unit Cost	Total Cost		Title		Amount
	Date	Quantity	Amount	Formula		Title		Amount
	Date	Quantity	Amount	Formula		Title		Formula
		Formula		Formula
			Proof of Cost of Goods Sold
			Date	Units	Unit Cost	Total Cost
			Date	Amount	Amount	Formula
			Date	Amount	Amount	Formula
			Date	Amount	Amount	Formula
			Date	Amount	Amount	Formula
				Formula		Formula
(b)(3) Determine the ending inventory and cost of goods sold under the Average Cost cost flow method.
		Total units purchased cost:			Amount
		Title			Quantity
		Average unit cost =			Formula	(Set to four decimal places.)
	Ending inventory quantity:						Quantity
	Ending inventory value:						Amount
	Cost of goods sold:						Formula
	Cost of goods available for sale						Formula
(c)(1) Which cost flow method results in the highest inventory amount for the balance sheet?
Enter text answer here.
										(c)(2) Which cost flow method results in the highest cost of goods sold for the income statement?
										Enter text answer here.

Answer & Explanation Solved by verified expert

See Answer