Assignment 6
Assignment 6
Gepetto Shoe Store uses the retail inventory method for its two departments, Women's Shoes and Men's Shoes.
The following information for each department is obtained.
Women's Men's
Item Shoes Shoes
Beginning inventory at cost $25,000 $45,000
Cost of goods purchased at cost 110,000 136,300
Net sales 178,000 185,000
Beginning inventory at retail 46,000 60,000
Cost of goods purchased at retail 179,000 185,000
Instructions
Compute the estimated cost of the ending inventory for each department under the retail inventory method.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
Cost-to-retail ratio:
Goods available for sale at cost $135,000 $181,300
Goods available for sale at retail $225,000 $245,000
Cost-to-retail ratio 60% 74%
After you have completed the requirements of E-20, consider these additional questions.
Answers are on the other tab in this file.
1. Suppose Women's Shoes ending inventory at retail changed to $56,000 . What is the estimated cost of en
2. Suppose Men's Shoes cost of goods purchased at retail changed to 195,000. What is the estimated cost o
s and Men's Shoes.
entory method.
s with a "?" .
During October, 10,900 units were sold. Express uses a periodic inventory system.
Instructions
(a) Determine the cost of goods available for sale.
(b) Determine (1) the ending inventory and (2) the cost of goods sold under each of the
assumed cost flow methods (FIFO, LIFO and average cost). Prove the accuracy of the
cost of goods sold under the FIFO and LIFO methods.
(c ) Which cost flow method results in (1) the highest inventory amount for the balance sheet and
(2) the highest cost of goods sold for the income statement?
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
Ending Inventory
Units Unit Cost Total Cost
4,100 $37.27 $152,818
Cost of Goods Sold
Cost of goods available for sale $139,000
Less: Ending inventory 45,000
Cost of goods sold $94,000
After you have completed the requirements of P6-2A, consider these additional questions.
Answers are on the other tab in this file.
1. Suppose that the number of units sold increased to 12,000. What is the impact on ending inventory and c
FIFO method is used?
2. Suppose that the number of units sold increased to 12,000. What is the impact on ending inventory and c
LIFO method is used?
3. Suppose that the number of units sold increased to 12,000. What is the impact on ending inventory and c
average cost method is used?
ge-cost with analysis
October, Express had in beginning
he following purchases of Fishe's CDs.
Suzuki is fully insured for fire losses but must prepare a report for the insurance company.
Instructions
(a) Compute the gross profit rate for November.
(b) Using the gross profit rate for November; determine the estimated cost of the inventory
lost in the fire.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
(a) November
Net Sales $600,000
Cost of goods sold
Beginning inventory $32,000
Purchases $389,000
Less: Purchase returns and allowances 13,300
Purchase discounts 8,500
Add: Freight-in 8,800 211,000
Cost of goods available for sale 243,000
Ending inventory 36,000
Cost of goods sold 279,000
Gross profit $321,000
After you have completed the requirements of P6-10A, consider this additional question.
Answers are on the other tab in this file.
1. Suppose that ending inventory in November changed to $45,000. What is the impact on the gross profit
rate and the estimated inventory lost in fire in December?
ting records showed the
the inventory
During March, 12,000 units were sold. Xinxin uses a periodic inventory system.
Instructions
(a) Determine the cost of goods available for sale.
(b) Determine (1) the ending inventory and (2) the cost of goods sold under each of the assumed cost
flow methods (FIFO, LIFO and average-cost). Prove the accuracy of the cost of goods sold under
the FIFO and LIFO methods. (Round average cost per unit to 3 decimal places.)
(c ) Which cost flow methods results in (1) the highest inventory amount for the balance sheet and
(2) the highest cost of goods sold for the income statement?
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
Ending Inventory
Units Unit Cost Total Cost
3,500 $40.71 $142,500
After you have completed the requirements of P6-2B, consider these additional questions.
Answers are on the other tab in this file.
1. Suppose that number of units sold decreased to 11,000. What is the impact on ending inventory and cos
FIFO method is used?
2. Suppose that number of units sold increased to 11,000. What is the impact on ending inventory and cost
LIFO method is used?
3. Suppose that number of units sold increased to 11,000. What is the impact on ending inventory and cost
average cost method is used?
cost with analysis
h, Xinxin had
the following
Liis Company is fully insured for fire losses but must prepare a report for the insurance company.
Instructions
(a) Compute the gross profit rate for the month of February
(b) Using the gross profit rate for February, determine both the estimated total inventory
and inventory loss in the fire in March
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
(a) February
Net Sales $300,000
Cost of goods sold
Beginning inventory $4,500
Net purchases $176,800
Add: Freight-in 3,900
Cost of goods purchased 15,700
Cost of goods available for sale 3,900
Ending inventory 20,200
Cost of goods sold 16,300
Gross profit $283,700
After you have completed the requirements of P6-10B, consider this additional question.
Answers are on the other tab in this file.
1. Suppose that ending inventory in November changed to $25,000. What is the impact on the gross profit
rate and the estimated inventory lost in fire in December?
showed the following