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Inventory Exercise

This document contains 7 questions about inventory valuation methods. Each question provides inventory, purchase, and sales data for a different company and asks the reader to use one or more inventory costing methods - periodic, perpetual, FIFO, moving average, retail, or gross profit - to calculate ending inventory costs.

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368 views2 pages

Inventory Exercise

This document contains 7 questions about inventory valuation methods. Each question provides inventory, purchase, and sales data for a different company and asks the reader to use one or more inventory costing methods - periodic, perpetual, FIFO, moving average, retail, or gross profit - to calculate ending inventory costs.

Uploaded by

newaybeyene5
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Exercise on Inventory

1. In its beginning inventory on Jan1, 2020 XYZ Company had 12o units of merchandize that cost Br.8 per unit. The
following transaction were completed during 2020.
February 5. Purchased on credit 150 units of merchandize at Br.10 per unit.
9. Returned 20 defective units from February 5 purchase to the supplier
June 15. Purchased for cash 230 units of merchandize at Br.9 per unit.
September 6. Sold 220 units of merchandize for cash at a price of 15 per unit. These good are: 120 units from the
beginning inventory and 100 for February purchases.
December 31. 230 units are left on hand, 30 units from February purchases.
Required: - Prepare general journal entries for XYZ Company to record the above transactions and adjusting or closing
entry for merchandize inventory on December 31, 2020 using;
A. Periodic inventory system
B. Perpetual inventory system
2. The units of an item available for sale during the year were as follows:

January 1 Inventory 42 units at Br 120


March 4 purchase 58 units at Br 130
August 7 Purchase 20 units at Br 136
November 15 purchase 30 units at Br 140
There are 36 units of the item in the physical inventory at December 31. The periodic inventory system is used.
Determine the inventory cost by (a) the first-in, first-out method, and (b) the average cost method

3. Beginning inventory, purchases, and sales data for portable CD players are as follows:
April 1 Inventory 35 units at Br 50
5 Sale 26 units at Br 60
11 purchase 15 units at Br 53
21 Sale 12 units at Br 65
28 Sale 4 units at Br 65
30 purchase 7 units at Br 54
Assume that the perpetual inventory system is used. Determine the cost of merchandise sold and ending inventory by
using the: (a) the first-in, first-out method, and (b) the moving average cost method.
Retail Inventory Costing method
4. Selected data on merchandise inventory, purchases, and sales for CLoyalx Co. are as follows:
Cost Retail
Merchandise inventory, February 1 Br 210,000 Br 300,000
Transactions during February:
Purchases (net) 1,135,500 1,650,000
Sales 1,800,000
Sales returns and allowances 40,000
Required: Determine the estimated cost of the merchandise inventory of CLoyalx Co. on February 28 by the retail
method, presenting details of the computations.
5. Selected data on merchandise inventory, purchases, and sales for Shebelle Co. are as follows:
Cost Retail
Merchandise inventory, October 1 Br 98,000 Br 140,000
Transactions during October:
Purchases (net) 813,200 1,200,000
Sales 1,800,000
Sales returns and allowances 40,000
Required: Determine the estimated cost of the merchandise inventory of Shebelle Co. on October 31 by the retail
method, presenting details of the computations.
Gross profit Inventory Costing method

6. Selected data on merchandise inventory, purchases, and sales for Galaxy Co. are as follows:
Merchandise inventory, March 1 Br 250,000
Transactions during March and
April:
Purchases (net) 1,385,000
Sales 2,510,000
Sales returns and allowances 110,000
Estimated gross profit rate 36%
Required: Estimate the cost of the merchandise inventory of Galaxy Co. on April 30 by the gross profit method,
presenting details of the computations.

7. Selected data on merchandise inventory, purchases, and sales for Family Co. are as follows:
Merchandise inventory, August 1 Br 150,000
Transactions during August and September:
Purchases (net) 1,375,000
Sales 1,800,000
Sales returns and allowances 100,000
Estimated gross profit rate 35%
Required: Estimate the cost of the merchandise inventory of Family Co. on September 30 by the gross profit method,
presenting details of the computations.

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