Use the following information to answer questions 15-17 Tween Distribution marke
ID: 2436986 • Letter: U
Question
Use the following information to answer questions 15-17 Tween Distribution markets CDs of the performing artist Little Sister. At the beginning of October, Tween had in beginning inventory 1000 Sister's CDs with a unit cost of $5. During October Tween made the following purchases of Sister's CDs: Oct. 3 4,000@ $6 Oct. 19 2,000@ $8 Oct. 9 3,000@ $7 Oct. 25 2,500@ $9 During October 9,500 units were sold. 15. Determine Cost of Goods Sold using the weighted average assumption. a. $71,500 b. $67,260 c. $62,000 d. $67,500 16. Determine Cost of Goods Sold using the First In First Out (FIFO) assumption. a. $71,500 b. $67,260 c. $62,000 d. $67,500 17. Determine Cost of Goods Sold using the e In First Out (EIFO) assumption LASt LIFO a. $71,500 b. $67,260 c. $62,000 d. $67,500Explanation / Answer
Units Rate Amount Beginning Inventory 1000 $ 5.00 $ 5,000.00 Purchases 3rd Oct 4000 $ 6.00 $ 24,000.00 9th Oct 3000 $ 7.00 $ 21,000.00 19th Oct 2000 $ 8.00 $ 16,000.00 25th Oct 2500 $ 9.00 $ 22,500.00 ($88500/12500)=$7.08 12500 $ 7.08 $ 88,500.00 Ans b) Cost of goods sold= (9500*$7.08) $ 67,260.00 Ans (15) (weighted average method) Ans (16) Cost of goods sold (C ) (FIFO) (1000*$5+4000*$6+3000*$7+1500*$8) $ 62,000.00 Ans (17) Cost of goods sold (a ) (LIFO) (2500*$9+2000*$8+3000*$7+2000*$6) $ 71,500.00 Ans 20) Depreciation Expense for Truck 1=($43000-$3000)/4 $40000/4 $ 10,000.00 (A) Straight line depreciation is same in each year Formula=(Cost-Slavage Value)/Useful life Ans 21) Depreciation Expense for Truck 2 in 2020 (b) ($25000-$5000)*28000/100000 $ 5,600.00 Ans 22 Double Declining rate=(1/5)*200% 40% (b) Depreciation in 2018=($75000*40%) $ 30,000.00 Depreciation in 2019=($75000-$30000)*40%) $ 18,000.00 Accumulated Depreciation in 2019 $ 48,000.00