Sample content
EXERCISE 6-1
The correct inventory amount $351000
Ending inventory—physical count $297,000
1. No effect—title passes to purchaser upon shipment
when terms are FOB shipping point 0
2. No effect—title does not transfer to Alou until
goods are received 0
3. Add to inventory: Title passed to Alou when goods
were shipped 19,000
4. Add to inventory: Title remains with Alou until
purchaser receives goods 35,000
5. No effect – title passes to purchaser upon shipment
when terms are FOB shipping point, 0
Correct inventory $351,000
EXERCISE 6-10
The ending inventory $26900
Cost
Market
Lower
-of-Cost-
or-Market:
Cameras
$ 6,800
$ 7,000
$ 6,800
DVD players
11,250
10,350
10,350
Ipods
10,000
9,750
9,750
Total inventory
$28,050
$27,100
$26,900
EXERCISE 6-14
(a)
Silver Company
Gold Company
Inventory Turnover
$192,000
$292,000
($47,000 + $55,000)/2
= 3.76
($71,000 + $69,000)/2
2. 1. No effect—title passes to purchaser upon shipment
when terms are FOB shipping point 0
2. No effect—title does not transfer to Alou until
goods are received 0
3. Add to inventory: Title passed to Alou when goods
were shipped 19,000
4. Add to inventory: Title remains with Alou until
purchaser receives goods 35,000
5. No effect – title passes to purchaser upon shipment
when terms are FOB shipping point, 0
Correct inventory $351,000
EXERCISE 6-10
The ending inventory $26900
Cost
Market
Lower
-of-Cost-
or-Market:
Cameras
3. $ 6,800
$ 7,000
$ 6,800
DVD players
11,250
10,350
10,350
Ipods
10,000
9,750
9,750
Total inventory
$28,050
$27,100
$26,900
EXERCISE 6-14
(a)
Silver Company
Gold Company
Inventory Turnover
4. $192,000
$292,000
($47,000 + $55,000)/2
= 3.76
($71,000 + $69,000)/2
= 4.17
Days in Inventory
365/3.76 = 97 days
365/4.17 = 88 days
(b) Gold Company is moving its inventory more quickly, since its inventory
turnover is higher, and its days in inventory is lower
PROBLEM 6-3A
REFER TO THE SCREENSHOT AT THE PAGE END FOR ANSWERS AS IN
WILEYPLUS
(a)
COST OF GOODS AVAILABLE FOR SALE
Date
Explanation
Units
Unit Cost
7. Cost of goods available for sale
$19,900
12/8
200
$12
$2,400
Less: Ending inventory
5,700
8/12
300
11
3,300
500
$5,700
Cost of goods sold
$14,200
Proof of Cost of Goods Sold
Date
Units
Unit Cost
9. LIFO
(1)
Ending Inventory
(2)
Cost of Goods Sold
Date
Units
Unit Cost
Total Cost
Cost of goods available for sale
$19,900
1/1
400
$8
$3,200
Less: Ending inventory
4,100
2/20
100
9
10. 900
500
$4,100
Cost of goods sold
$15,800
Proof of Cost of Goods Sold
Date
Units
Unit Cost
Total Cost
12/8
200
$12
$ 2,400
8/12
600
11
6,600
5/5