41) Calculate the cost of goods sold under each of the following methods given the information below

about purchases an
140
April1 Beginning inventory20 units @ $30 115
11 Purchases70 units @ $32 25 FIFO LIFO weighted average
21 Purchases50 units @ $35 20 30 600
70 32 2240 875
Sales for April: 115 units 50 35 1750 3715 3715
140 4590
a) ________ FIFO 32.78571
b) ________ LIFO 3770.357
c) ________ Weighted-average 760
3830
42) The ________ holds the merchandise of another business to be sold. consignee

43) If merchandise is purchased ________, the buyer becomes the owner when the merchandise is placed on the car

44) Items that are very similar, such as canned goods in a grocery store would be costed using the ________ system

15.4   Learning Objective 15-4

1) A method that uses average gross profit rate and net sales to compute inventory is:
A) the retail method.
B) the LIFO. D) None of these answers are correct.
C) the weighted-average method. GP method
D) None of these answers are correct.

2) Chewy Candy has a beginning inventory of $1,000. June purchases were $3,000, and retail sales were $5,000. The
A) $2,100 1000 5000
B) $2,000 3000 2500
C) $1,700 2500
D) $1,500 1500

3) Chewy Candy has a beginning inventory of $1,000 with a retail value of $1,800. June purchases were $3,000, with
A) $351 1000 1800
B) $949 3000 4700 2300
C) $4,161 4000 6500 0.615385 1415.385
D) $1,416 4200
4) St. Paul Corporation has a normal gross profit of 45%. The current year's beginning inventory was $2,500, purch
A) $4,750. 15000 2500
B) $3,250. 8250 9000
C) $8,220. 11500
D) $4,050. 3250

5) St. Paul Corporation had a beginning inventory of $2,500 which would retail for $4,000. They made $9,000 in pur
A) $1,500 2500 4000
B) $3,400 9000 14400
C) $4,000 11500 18400 0.625
D) $2,125 15000
3400
2125
on below about purchases and sales during the year. Assume a periodic inventory system.
Answer 41
FIFO
Cost of goods sold = Cost of goods available for sale less Ending Inventory
Cost of goods sold = $ 4,590 less (25 units * $ 35 each) = $ 3,715

Cost of goods available for sale = Beginning Inventory add Purchases

Cost of goods available for sale = 20 units * $ 30 each add (70 units * $ 32 each) add (50 units * $ 35 each) = $ 4,590

LIFO
Cost of goods sold = Cost of goods available for sale less Ending Inventory
Cost of goods sold = $ 4,590 less ((20 units * $ 30 each) add (5 units * $ 32 each)) = $ 3,830

Cost of goods available for sale = Beginning Inventory add Purchases

se is placed on the carCost of goods available for sale = 20 units * $ 30 each add (70 units * $ 32 each) add (50 units * $ 35 each) = $ 4,590

ng the ________ system weighted average

weighted average cost per unit = Cost of goods available for sale/Total Units
weighted average cost per unit = $ 4,590/140 units = $ 32.79 per unit

Cost of goods sold = 115 units * $ 32.79 per unit = $ 3,770

42) The CONSIGNEE holds the merchandise of another business to be sold.

43) If merchandise is purchased FOB SHIPPING, the buyer becomes the owner when the merchandise is placed

sales were $5,000. The44) Items that are very similar, such as canned goods in a grocery store would be costed using the AVERAGE sys

Answer 15-4-1
D) None of these answers are correct.
Gross profit method uses gross profit rate and net sales to compute inventory.

ases were $3,000, withAnswer 15-4-2

D) $1,500
Ending Inventory = Beginning Inventory add Purchases less Cost of goods sold
Ending Inventory = $ 1,000 add $ 3,000 less $ 2,500 = $ 1,500

ory was $2,500, purch Cost of goods sold = Sales less Gross Profit
Cost of goods sold = $ 5,000 less 50 % of $ 5,000 = $ 2,500

Answer 15-4-3
D) $1,416
Cost Retail
ey made $9,000 in purBeginning Inventory $ 1,000 $ 1,800
Purchases $ 3,000 $ 4,700
Cost of goods available for sale $ 4,000 $ 6,500
less: sales $ 4,200
Ending inventory at retail price $ 2,300
multiplied by cost to retail ratio 61.55%
Ending inventory at cost $ 1,416

Cost to retail ratio = Cost of goods available for sale at cost price/Cost of goods available for sale at retail price * 10
Cost to retail ratio = $ 4,000/$ 6,500 * 100 = 61.55 %

Answer 15-4-4
B) $3,250.
Ending Inventory = Beginning Inventory add Purchases less Cost of goods sold
Ending Inventory = $ 2,500 add $ 9,000 less $ 8,250 = $ 3,250

Cost of goods sold = Sales less Gross Profit

Cost of goods sold = $ 15,000 less 45 % of $ 15,000 = $ 8,250

Answer 15-4-5
D) $2,125
Cost Retail
Beginning Inventory $ 2,500 $ 4,000
Purchases $ 9,000 $ 14,400
$ 11,500 $ 18,400
less: sales $ 15,000
Ending inventory at retail price $ 3,400
multiplied by cost to retail ratio 62.50%
Ending inventory at cost $ 2,125

Cost to retail ratio = Cost of goods available for sale at cost price/Cost of goods available for sale at retail price * 10
Cost to retail ratio = $ 11,500/$ 18,400 * 100 = 62.50 %
nits * $ 35 each) = $ 4,590

nits * $ 35 each) = $ 4,590

e merchandise is placed on the carrier.

d using the AVERAGE system of inventory valuation.

Cost to reta0.615385
or sale at retail price * 100

$ 0.63

or sale at retail price * 100