queentaryn13
26.02.2020 •
Business
The Breeze trading company discloses the following information for the month of August 2016.
Aug. 01: Beginning inventory, 600 units @ $5 each each.
Aug. 10: Sold 400 units @ $12 each.
Aug. 11: Purchased 1,600 units @ $6 each.
Aug. 15: Sold 1,000 units @ $12.50 each.
Aug. 20: Purchased 1,000 units @ $6.50 each.
Aug. 27: Sold 600 units @ $13.50 each.
Required:
Assume the Breeze trading company uses periodic inventory system, compute cost of goods sold (COGS), ending inventory and gross profit under:
(a). FIFO
(b). LIFO
Assume the Breeze company uses perpetual inventory system, compute cost of goods sold (COGS), ending inventory and gross profit under:
(a). FIFO
(b). LIFO
Explain the reason of higher gross profit under FIFO than LIFO?
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Ответ:
Periodic system: FIFO ; COGS= $11400, closing inventory = $7700, gross profit=$14000. LIFO = closing stock= 6600, COGS=$12500, gross profit=12900.
perpetual system: FIFO ;COGS=11400, closing stock= $7700, gross profit= $11400. LIFO ; COGS=$12500, closing stock= $6600, gross profit = $12900
Reason for a higher gross profit in FIFO than LIFO is some of the stock ends up not being sold as they are maybe old, out-fashioned, and obviously new trend come about everyday.
Explanation:
PERIODIC
DR purchases account CR
11-Augbank9600 inventory16100
20-Augbank6500
16100 16100
FIFA cost of sales
opening balance 3000
purchases 16100
closing 7700
cost of sales 11400
gross profit 14000
sales 25400
cost of sales 11400
closing inventory 7700
200 units from 11 aug 1200
1000 units from 20 aug 6500
LIFO
closing balance 6600
600 units from 01 aug 3000
600 units from 11 aug 3600
Cost of sales
opening stock 3000
purchases 16100
closing stock 6600
cost of sales 12500
gross profit 12900
sales 25400
cost of sales 12500
perpetual inventory system
FIFA
cost of sales 11400
10-Aug 2000
15-Aug 5800
27-Aug 3600
Ответ:
The area of a triangle is half the base times the height. The formula is A = 1/2b(h)
1/2b(h)
1/2(14)(8)
(7)(8)
56