Name Chapter 7 342

EXERCISE 7-1

EXERCISE 7-2 a.

b.

c.

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Name Chapter 7

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343

EXERCISE 7-3

Portable Video CD Players

Purchases Cost of Merchandise Sold Inventory Date

Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost

Name Chapter 7

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344

EXERCISE 7-4

Portable Video CD Players

Purchases Cost of Merchandise Sold Inventory Date

Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost

Name Chapter 7

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345

EXERCISE 7-5

Cell Phones

Purchases Cost of Merchandise Sold Inventory Date

Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost

Name Chapter 7

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346

EXERCISE 7-6

Cell Phones

Purchases Cost of Merchandise Sold Inventory Date

Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost

Name Chapter 7 347

EXERCISE 7-7

a. FIFO:

b. LIFO:

EXERCISE 7-8 a. First-in, first-out method:

b. Last-in, first-out method:

c. Average cost method:

EXERCISE 7-9 Cost Inventory Method Merchandise Inventory Merchandise Sold

a. First-in, first-out................

b. Last-in, first-out................

c. Average cost....................

Supporting calculations:

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Name Chapter 7 348

EXERCISE 7-10

a. FIFO inventory _________ LIFO inventory

b. FIFO cost of goods sold _________ LIFO cost of goods sold

c. FIFO net income _________ LIFO net income

d. FIFO income tax _________ LIFO income tax

2.

EXERCISE 7-11

A B C D E F G 1 Unit Unit Total 2 Inventory Cost Market Lower 3 Commodity Quantity Price Price Cost Market of C or M 4 Aquarius 20 $ 80 $ 92 5 Capricorn 50 70 65 6 Leo 8 300 280 7 Scorpio 30 40 30 8 Taurus 100 90 94 9 Total

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Name Chapter 7 349

EXERCISE 7-12

EXERCISE 7-13

a. Balance Sheet

Merchandise inventory .......................................

Current assets ....................................................

Total assets ........................................................

Owner’s equity....................................................

b. Income Statement

Cost of merchandise sold...................................

Gross profit .........................................................

Net income..........................................................

EXERCISE 7-14

a. Balance Sheet

Merchandise inventory .......................................

Current assets ....................................................

Total assets ........................................................

Owner’s equity....................................................

b. Income Statement

Cost of merchandise sold...................................

Gross profit .........................................................

Net income..........................................................

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Name Chapter 7 350

EXERCISE 7-15

APPENDIX EXERCISE 7-16

APPENDIX EXERCISE 7-17

APPENDIX EXERCISE 7-18

APPENDIX EXERCISE 7-19 A B C 1 Cost Retail

2

3

4

5

6

7

8

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Name Chapter 7 351

APPENDIX EXERCISE 7-20

a. A B C 1 Cost Retail

2

3

4

5

6

7

8

b.

APPENDIX EXERCISE 7-21

APPENDIX EXERCISE 7-22

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Name Chapter 7 352

EXERCISE 7-23

a. Apple:

American Greetings:

b.

EXERCISE 7-24

a. Number of Days’ Sales in Inventory =

Kroger:

Safeway:

Winn-Dixie:

Inventory Turnover =

Kroger:

Safeway:

Winn-Dixie:

b.

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Name Chapter 7

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353

EXERCISE 7-24, Concluded

c.

Name Chapter 7

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354 PROBLEM 7-1 ___ 1.

Purchases Cost of Merchandise Sold Inventory Date

Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost

Name Chapter 7 355

PROBLEM 7-1 ___, Concluded

2. JOURNAL PAGE

DATE DESCRIPTION POST.REF. DEBIT CREDIT

1 1

2 2

3 3

4 4

5 5

6 6

7 7

8 8

9 9

10 10

3.

4.

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Name Chapter 7

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356

PROBLEM 7-2 ___ 1.

Purchases Cost of Merchandise Sold Inventory Date

Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost

Name Chapter 7 357

PROBLEM 7-2 ___, Concluded

2. and 3.

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Name Chapter 7 358

PROBLEM 7-3 ___ 1. First-In, First-Out Method

Model Quantity Unit Cost Total Cost

2. Last-In, First-Out Method

Model Quantity Unit Cost Total Cost

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Name Chapter 7 359

PROBLEM 7-3 ___, Concluded 3. Average Cost Method

Model Quantity Unit Cost Total Cost

Computations of unit costs:

4. a.

b.

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Name Chapter 7

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360

PROBLEM 7-4 ___

A B C D E F G H 1

2 Inventory Sheet December 31, 2010

3 4 Unit Unit Total 5 Inventory Cost Market Lower 6 Description Quantity Price Price Cost Market of C or M 7 Alpha 10 38 30 $ 60 $ 57 $1,800 $1,710 8 8 59 472 456 9 2,272 2,166 $ 2,166

10 Beta 30 18 180 11 Charlie 4 30 120 12 13 14 Echo 9 125 26 15 Frank 6 18 550 16 17 18 George 15 60 15 19 Killo 6 5 390 20 Quebec 12 375 6 21 Romeo 7 90 18 22 23 24 Sierra 3 6 235 25 26 27 Washburn 2 140 20 28 29 30 X-Ray 4 15 745 31 32 33 Total 34 35

Name Chapter 7

This Page Not Used.

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Name Chapter 7 362

APPENDIX PROBLEM 7-5 ___ 1.

A B C 1

2 Cost Retail

3

4

5

6

7

8

9

10

11

12

2. A B C 1

2 a. Cost Retail

3

4

5

6

7

8

9

10

11

12

13 b.

14

15

16

17

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Name Chapter 7

This Page Not Used.

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