Financial Accounting: An Integrated Statements Approach, 2nd Edition

Quantity and cost data from the last purchase invoice of the year and the next-to-the-last

purchase invoice are summarized as follows:

Last Next-to-the-Last

Purchases Invoice Purchases Invoice

Quantity Unit Quantity Unit

Description Purchased Cost Purchased Cost

A90 25 $ 59 40 $ 58

C18 25 188 15 191

D41 16 145 15 142

E34 150 25 100 27

F17 6 550 15 540

G68 75 14 100 13

K41 8 400 4 398

Q79 500 6 500 7

R72 70 18 50 16

S60 5 250 4 260

W21 120 20 115 17

Z35 8 701 7 699

Instructions

Determine the inventory at cost and also at the lower of cost or market, using the first-in, first-

out method. Record the appropriate unit costs on an inventory sheet and complete the pricing of

the inventory. When there are two different unit costs applicable to an item, proceed as follows:

1. Draw a line through the quantity, and insert the quantity and unit cost of the last purchase.


2. On the following line, insert the quantity and unit cost of the next-to-the-last purchase.


3. Total the cost and market columns and insert the lower of the two totals in the Lower of
   C or M column. The first item on the inventory sheet has been completed below as an
   example.

Inventory Sheet

December 31, 2007

Total

Inventory Unit Cost Unit Market Lower of

Description Quantity Price Price Cost Market C or M

A90 35 25 $59 $57 $1,475 $1,425

10 58 580 570

$2,055 $1,995 $1,995

294 Chapter 6 Inventories

Alternate Problem

6-1B

Fifo perpetual inventory

Goals3, 4

3. $4,895

ALTERNATE ACCOUNTING APPLICATION PROBLEMS

The beginning inventory of floor mats at Intermountain Office Supplies and data on purchases

and sales for a three-month period are as follows:

Number Per

Date Transaction of Units Unit Total

Apr. 1 Inventory 200 $2.10 $ 420

8 Purchase 800 2.20 1,760

20 Sale 350 4.00 1,400

30 Sale 450 4.00 1,800

May 8 Sale 50 4.10 205

10 Purchase 500 2.30 1,150

27 Sale 350 4.20 1,470

31 Sale 200 4.50 900

(continued)