606 Chapter 15 Payroll and Inventory
Topic Key Ideas, Formulas, and Techniques Examples
Calculating Cost of Goods
Sold, p. 597- Cost of goods sold beginning inventory
value purchases
ending inventory value
Suppose that Plum Street
Pharmacy began the third
quarter with inventory
valued at $545,636. It
made purchases totaling
$1,275,936, and its end-
of-quarter inventory was
$659,800. Calculate the cost
of goods sold in the third
quarter. (Example 15.2.5)The Retail Method of
Inventory Valuation, p. 598- Multiply the total retail price of inventory by the
assumed cost percent.
Plum Street Pharmacy
had retail sales totaling
$1,475,023 in the third
quarter. Its cost of goods
sold normally averages
approximately 78%. Use
these facts to estimate the
cost of the goods sold in the
third quarter. (Example 15.2.7)Cost Basis and Capital Gains,
p. 598- Cost basis is the calculated cost of an
investment. - Cost basis for stock investments when some
shares have been sold is done on a FIFO basis. - Capital gain amount from sale cost basis.
Sarah recently sold 250
shares of Tesla Nitrates Corp.
for a total sale price of $8,745.
These shares came from an
investment in the company
that she acquired by buying
100 shares of stock in 1999
for $1,755, 200 shares in 2003
for which she paid $5,578,
and 450 shares that she
bought in 2005 for $24,935.
Determine the cost basis for
the shares she sold and the
capital gain from the sale.
(Example 15.2.8)