Question: At January 1 2016 the accounting records of Ginger s Boutique

At January 1, 2016, the accounting records of Ginger’s Boutique had the following balances:
Cash ........ $1,000
Inventory ....... 2,250 (150 units @ $15)
Common stock ..... 2,000
Retained earnings ... 1,250
During January, Ginger’s Boutique entered into five cash transactions:
1. Purchased 120 units of inventory @ $16 each.
2. Purchased 160 units of inventory @ $17 each.
3. Sold 330 units of inventory @ $30 each.
4. Incurred $1,700 of operating expenses.
5. Paid income tax at the rate of 30 percent of income before taxes.
a. Set up rows 1 through 10 of the following spreadsheet to compute cost of goods sold and ending inventory, assuming
(1) FIFO,
(2) LIFO, and
(3) Weighted-average cost flows.
Notice that the FIFO cost flow has already been completed for you. Use columns O through W to complete the LIFO and weighted-average cost flow computations. Be sure to use formulas for all calculations.
b. In rows 13 through 31, compute the amount of net income and net cash flow from operations under FIFO, LIFO, and weighted average. The FIFO column has been provided as an example.

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  • CreatedApril 20, 2015
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