In June, Bill decided to open a small retail operation selling bags of fertilizer to the...

 

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In June, Bill decided to open a small retail operation selling bags of fertilizer to the public. He has decided to begin by offering two kinds of fertilizer. Below is the infomation for the month of June, 2014, for the two types of fertilizer. Product Feed All Fertilizer |Weed and Feed Al Fertilizer Selling Price $27.00 $35.00 Purchase Data Date 6/1/2014 6/1/2014 6/11/2014 6/15/2014 6/22/2014 6/28/2014 6/28/2014 All purchases are paid in cash at the time of the purchase and Bill picks up the fertilizer from the distributor, so there is no freight charge. Product Feed All Fertilizer Weed and Feed All Fertilizer Feed All Fertilizer Weed and Feed All Fertilizer Feed All Fertilizer Feed All Fertilizer Weed and Feed All Fertilizer Quantity (Bags) Price per Bag 15. 00 20.00 15.50 19.50 15.75 15.50 19.75 10 10 20 10 10 10 10 Sales Data (summarized by week) Date 6/9/2014 6/9/2014 6/16/2014 6/16/2014 Quantity (Bags) 6. Product Feed All Fertilizer Weed and Feed All Fertilizer Feed All Fertilizer Weed and Feed All Fertilizer 12 6/23/2014 6/23/2014 Feed All Fertilizer Weed and Feed All Fertilizer Feed All Fertilizer Weed and Feed All Fertilizer 8. 6/30/2014 6/30/2014 All sales are on credit. 10 4. In addition to the sales, on 6/20/14, a customer returned one bag of Feed All Fertilizer to Bill for credit on account. Instructions: 1. Cakulate the Cost of Goods Sold and the Ending Inventory values for the fertilizer products under 1) Average Cost, 2) First-in, First-Out(FIFO), and 3) Last-in, First-Out (LIFO). You will need to calculate ending inventory from the purchase, sale and return data given, you may assume that a physical count confimed your calculation of the number of units in ending inventory value to be reported for the end of June, 2014. Use the last purchase prices for the market value. You only need to calculate cost under the FIFO method for this comparison. 3. Prepare the Cost of Goods Sold section of the Income Statement. 1) Average Cost Sample of how to fill out this page using Average Cost COST OF GOODS AVAILABLE FOR SALE Feed All Fertilizer COST OF GOODS AVAILABLE FOR SALE XXXXX Fertilizer Unit Cost Unit Cost Total Cost $150.00 $310.00 $158.00 Explanation Units Explanation Units Purchase Purchase Date Date Total Cost 6/1 10 $15.00 6/15 Purchase 10 $5.00 $50.00 6/11 20 $15.50 6/28 Purchase 25 $5.10 $127.50 6/22 Purchase 10 $15.75 Total 35 177.50 $155.00 SZ72.50 6/28 Purchase 10 $15 50 ENDING INVENTORY $ 177.50 COST OF GOODS SOLD Total 135 $5.07 Cost of Goods Available for Sale $ 177.50 ENDING INVENTORY Less: Ending Inventory COST OF GOODS SOLD Cost of Goods Available for Sale 55.77 $15.45 S772.50 $231.75 $540.75 $772.50 Units 11 $ Unit Cost Total Cost $ 121.73 50 Cost of Goods Sold Less: Ending inventory Cost of Goods Sold 5.07 $55.77 Units 15 Unit Cost Total Cost $15.45 $231.75 A good example is located in your e-text (illustration 6-6) COST OF GOODS AVAILABLE FOR SALE Weed and Feed All Fertilizer Date Explanation Units Unit Cost Total Cost 6/1 Purchase 10 S20.00 $200.00 $195.00 $198.00 S502.50 $19 50 10 10 30 6/15 Purchase 6/28 Purchase $19.75 Total COST OF GOODS SOLD ENDING INVENTORY $592.50 Cost of Goods available for sale Less Ending Inventory Cost of Goods Sold $592 50 $296 25 $296.25 130 $19.75 Unit Cost $19.75 Total Cost $296.25 Units 15 2) First-In, First-Out (FIFO) 2) First-In, First-Out (FIFO) COST OF GOODS AVAILABLE FOR SALE Feed All Fertilizer Unit Cost Total Cost $150 00 Date Explanation Units 6/1 Purchase 10 $15.00 6/1 Purchase 20 10 10 $15.50 $15.75 $310.00 $158.00 $155.00 6/22 Purchase 6/28 Purchase $15.50 Total 50 $15.45 SZ72 50 Sample of the El and COGS calculation for FIFO or LIFO, Cost of Goods Available is the same as in the COST OF GOODS SOLD Average Cost sample above ENDING INVENTORY COST OF GOODS SOLD ENDING INVENTORY Total Cost 56.10 $ 177.50 56. 10 $ 121.40 Date Total Cost $155.00 Cost of Goods Available for Sale $772.50 $233 75 $538.75 Date 6/28 Unit Cost 5.10 Units Unit Cost Units Cost of Goods Available for Sale Less. Ending Inventory Cost of Goods Sold 6/1 10 $15.50 Less Ending inventory 11 6/22 $15.75 $78.75 Cost of Goods Sold Total 15 $233.75 Total 11 $ 6.10 COST OF GOODS AVAILABLE FOR SALE Weed and Feed AllI Fertilizer Date Total Cost Explanation Purchase Units Unit Cost 6/1 10 $20 $200.00 $195.00 $198.00 S592.50 6/15 10 10 20 Purchase $19.50 6/28 Purchase S19.75 Total ENDING INVENTORY COST OF GOODS SOLD Unit Cost 10 $19.75 5 $19.50 Total Cost $197.50 $97.50 $592.50 $295.00 $297.50 Date Units Cost of Goods Available for Sale 6/28 6/15 Less Ending Inventory Cost of Goods Sold Total 15 $295.00 2) Last-In, First-Out (LIFO) COST OF GOODS AVAILABLE FOR SALE Feed All Fertilizer Date Explanation Units Unit Cost Total Cost $150 .00 $310.00 6/1/2014 Purchase 10 20 10 $15.00 $15.50 $15.75 $15.50 $15.45 6/11/2014 Purchase 6/22/2014 Purchase $158.00 $155.00 S772.50 6/28/2014 Purchase 10 50 Total COST OF GOODS SOLD Cost of Goods Avallabie for Sale Less: Ending Inventory ENDING INVENTORY Units Total Cost $150.00 S77.50 Date Unit Cost $772 50 $15.00 $15.50 $227.50 $545.00 6/1 10 6/22? Cost of Goods Sold 15 $227.50 COST OF GOODS AVAILABLE FOR SALE Weed and Feed All Fertilize Date 6/1/2014 Explanation Purchase Units Unit Cost Total Cost $200.00 $195.00 $198.00 $592.50 10 $20 $19.50 $19.75 6/15/2014 Purchase 10 6/28/2014 Purchase 10 30 Total COST OF GOODS SOLD ENDING INVENTORY Date 6/1 6/15 Units Unit Cost $20.00 $19.50 Total Cost $200.00 $97.50 Cost of Goods Available for Sale $592.50 $297.50 $295.00 10 Less: Ending inventory Cost of Goods Sold 15 $297.50 B D E F G H K 1 Lower of Cost or Market (LCM) 2 Sample of how to fill out the LCM sheet 3 Item Total Cost Total Market LCM Total Cost Total Market* LCM ltem XXX Fertilizer 4 150.00 S 85.00 175.00 $ 150.00 5 6 YYY Fertilizer #并并 %2229.00 r 79.00 ITotal Inventory 7. 8 *These numbers are total cost and market, not per unit 9 10 11 12 13 14 Agood example is located IN your e-text (llustration 6-16) 15 16 17 18 19 20 21 A D H K 2 3 Sample of COGS section of Income Statement Cost of Goods Sold 4 Inventory, June 1 6. Purchases Less: Purchase Returns and Allowances Cost of Goods Purchased Cost of Goods Available for Sale Inventory, June 30 9 10 Cost of Goods Sold 11 12 Agood example is located in your e-text (Illustration 5-B2) 13 14 15 16 In June, Bill decided to open a small retail operation selling bags of fertilizer to the public. He has decided to begin by offering two kinds of fertilizer. Below is the infomation for the month of June, 2014, for the two types of fertilizer. Product Feed All Fertilizer |Weed and Feed Al Fertilizer Selling Price $27.00 $35.00 Purchase Data Date 6/1/2014 6/1/2014 6/11/2014 6/15/2014 6/22/2014 6/28/2014 6/28/2014 All purchases are paid in cash at the time of the purchase and Bill picks up the fertilizer from the distributor, so there is no freight charge. Product Feed All Fertilizer Weed and Feed All Fertilizer Feed All Fertilizer Weed and Feed All Fertilizer Feed All Fertilizer Feed All Fertilizer Weed and Feed All Fertilizer Quantity (Bags) Price per Bag 15. 00 20.00 15.50 19.50 15.75 15.50 19.75 10 10 20 10 10 10 10 Sales Data (summarized by week) Date 6/9/2014 6/9/2014 6/16/2014 6/16/2014 Quantity (Bags) 6. Product Feed All Fertilizer Weed and Feed All Fertilizer Feed All Fertilizer Weed and Feed All Fertilizer 12 6/23/2014 6/23/2014 Feed All Fertilizer Weed and Feed All Fertilizer Feed All Fertilizer Weed and Feed All Fertilizer 8. 6/30/2014 6/30/2014 All sales are on credit. 10 4. In addition to the sales, on 6/20/14, a customer returned one bag of Feed All Fertilizer to Bill for credit on account. Instructions: 1. Cakulate the Cost of Goods Sold and the Ending Inventory values for the fertilizer products under 1) Average Cost, 2) First-in, First-Out(FIFO), and 3) Last-in, First-Out (LIFO). You will need to calculate ending inventory from the purchase, sale and return data given, you may assume that a physical count confimed your calculation of the number of units in ending inventory value to be reported for the end of June, 2014. Use the last purchase prices for the market value. You only need to calculate cost under the FIFO method for this comparison. 3. Prepare the Cost of Goods Sold section of the Income Statement. 1) Average Cost Sample of how to fill out this page using Average Cost COST OF GOODS AVAILABLE FOR SALE Feed All Fertilizer COST OF GOODS AVAILABLE FOR SALE XXXXX Fertilizer Unit Cost Unit Cost Total Cost $150.00 $310.00 $158.00 Explanation Units Explanation Units Purchase Purchase Date Date Total Cost 6/1 10 $15.00 6/15 Purchase 10 $5.00 $50.00 6/11 20 $15.50 6/28 Purchase 25 $5.10 $127.50 6/22 Purchase 10 $15.75 Total 35 177.50 $155.00 SZ72.50 6/28 Purchase 10 $15 50 ENDING INVENTORY $ 177.50 COST OF GOODS SOLD Total 135 $5.07 Cost of Goods Available for Sale $ 177.50 ENDING INVENTORY Less: Ending Inventory COST OF GOODS SOLD Cost of Goods Available for Sale 55.77 $15.45 S772.50 $231.75 $540.75 $772.50 Units 11 $ Unit Cost Total Cost $ 121.73 50 Cost of Goods Sold Less: Ending inventory Cost of Goods Sold 5.07 $55.77 Units 15 Unit Cost Total Cost $15.45 $231.75 A good example is located in your e-text (illustration 6-6) COST OF GOODS AVAILABLE FOR SALE Weed and Feed All Fertilizer Date Explanation Units Unit Cost Total Cost 6/1 Purchase 10 S20.00 $200.00 $195.00 $198.00 S502.50 $19 50 10 10 30 6/15 Purchase 6/28 Purchase $19.75 Total COST OF GOODS SOLD ENDING INVENTORY $592.50 Cost of Goods available for sale Less Ending Inventory Cost of Goods Sold $592 50 $296 25 $296.25 130 $19.75 Unit Cost $19.75 Total Cost $296.25 Units 15 2) First-In, First-Out (FIFO) 2) First-In, First-Out (FIFO) COST OF GOODS AVAILABLE FOR SALE Feed All Fertilizer Unit Cost Total Cost $150 00 Date Explanation Units 6/1 Purchase 10 $15.00 6/1 Purchase 20 10 10 $15.50 $15.75 $310.00 $158.00 $155.00 6/22 Purchase 6/28 Purchase $15.50 Total 50 $15.45 SZ72 50 Sample of the El and COGS calculation for FIFO or LIFO, Cost of Goods Available is the same as in the COST OF GOODS SOLD Average Cost sample above ENDING INVENTORY COST OF GOODS SOLD ENDING INVENTORY Total Cost 56.10 $ 177.50 56. 10 $ 121.40 Date Total Cost $155.00 Cost of Goods Available for Sale $772.50 $233 75 $538.75 Date 6/28 Unit Cost 5.10 Units Unit Cost Units Cost of Goods Available for Sale Less. Ending Inventory Cost of Goods Sold 6/1 10 $15.50 Less Ending inventory 11 6/22 $15.75 $78.75 Cost of Goods Sold Total 15 $233.75 Total 11 $ 6.10 COST OF GOODS AVAILABLE FOR SALE Weed and Feed AllI Fertilizer Date Total Cost Explanation Purchase Units Unit Cost 6/1 10 $20 $200.00 $195.00 $198.00 S592.50 6/15 10 10 20 Purchase $19.50 6/28 Purchase S19.75 Total ENDING INVENTORY COST OF GOODS SOLD Unit Cost 10 $19.75 5 $19.50 Total Cost $197.50 $97.50 $592.50 $295.00 $297.50 Date Units Cost of Goods Available for Sale 6/28 6/15 Less Ending Inventory Cost of Goods Sold Total 15 $295.00 2) Last-In, First-Out (LIFO) COST OF GOODS AVAILABLE FOR SALE Feed All Fertilizer Date Explanation Units Unit Cost Total Cost $150 .00 $310.00 6/1/2014 Purchase 10 20 10 $15.00 $15.50 $15.75 $15.50 $15.45 6/11/2014 Purchase 6/22/2014 Purchase $158.00 $155.00 S772.50 6/28/2014 Purchase 10 50 Total COST OF GOODS SOLD Cost of Goods Avallabie for Sale Less: Ending Inventory ENDING INVENTORY Units Total Cost $150.00 S77.50 Date Unit Cost $772 50 $15.00 $15.50 $227.50 $545.00 6/1 10 6/22? Cost of Goods Sold 15 $227.50 COST OF GOODS AVAILABLE FOR SALE Weed and Feed All Fertilize Date 6/1/2014 Explanation Purchase Units Unit Cost Total Cost $200.00 $195.00 $198.00 $592.50 10 $20 $19.50 $19.75 6/15/2014 Purchase 10 6/28/2014 Purchase 10 30 Total COST OF GOODS SOLD ENDING INVENTORY Date 6/1 6/15 Units Unit Cost $20.00 $19.50 Total Cost $200.00 $97.50 Cost of Goods Available for Sale $592.50 $297.50 $295.00 10 Less: Ending inventory Cost of Goods Sold 15 $297.50 B D E F G H K 1 Lower of Cost or Market (LCM) 2 Sample of how to fill out the LCM sheet 3 Item Total Cost Total Market LCM Total Cost Total Market* LCM ltem XXX Fertilizer 4 150.00 S 85.00 175.00 $ 150.00 5 6 YYY Fertilizer #并并 %2229.00 r 79.00 ITotal Inventory 7. 8 *These numbers are total cost and market, not per unit 9 10 11 12 13 14 Agood example is located IN your e-text (llustration 6-16) 15 16 17 18 19 20 21 A D H K 2 3 Sample of COGS section of Income Statement Cost of Goods Sold 4 Inventory, June 1 6. Purchases Less: Purchase Returns and Allowances Cost of Goods Purchased Cost of Goods Available for Sale Inventory, June 30 9 10 Cost of Goods Sold 11 12 Agood example is located in your e-text (Illustration 5-B2) 13 14 15 16