Problem 8-8 (Part Level Submission) Morgan’s Televisions produces television set
ID: 2568497 • Letter: P
Question
Problem 8-8 (Part Level Submission) Morgan’s Televisions produces television sets in three categories: portable, midsize, and flat-screen. On January 1, 2017, Morgan adopted dollar-value LIFO and decided to use a single inventory pool. The company’s January 1 inventory consists of:
Category
Quantity
Cost per Unit
Total Cost
During 2017, the company had the following purchases and sales.
Category
Quantity
Purchased
Cost per Unit
Quantity
Sold
Selling Price
per Unit
-Calculate price index
2-Compute ending inventory, cost of goods sold, and gross profit.
3-"Assume the company uses three inventory pools instead of one.
Category
Quantity
Cost per Unit
Total Cost
Portable 6,200 $124 $ 768,800 Midsize 7,900 310 2,449,000 Flat-screen 3,100 496 1,537,600 17,200 $4,755,400Explanation / Answer
Index I ans 1 1.1 (124*110%)=136 Portable 1.2 310*1.2=372 Midsize 1.25 (496*1.25)=620 Flat screen Ending Inventory ans 2 Beg Inv Purchases Sales Ending Inventory Base price Base cost BI @ base B Incraesed Index I Ending Inventory value B*I Portable 6200 15200 14400 7000 124 868000 768800 99200 1.1 (124*110%)=136 845680 Midsize 7900 19900 23200 4600 310 1426000 2449000 1.2 310*1.2=372 2938800 Flat screen 3100 9700 6200 6600 496 3273600 1537600 1736000 1.25 (496*1.25)=620 1922000 Ending Inventory 5706480 Sales 18937600 Cost of Good sold=BI+Purchases-EI 14532920 4755400+15484000-5706480 Gross Profit 4404680 Category Quantity Cost per Unit Cost Quantity Selling Price Purchased Sold per Unit Sales Portable 15,200 136 2067200 14,400 186 2678400 Midsize 19,900 372 7402800 23,200 502 11646400 Flat-screen 9,700 620 6014000 6,200 744 4612800 15484000 18937600 ans 3 Beg Inv Purchases Total Total cost weighted avg cost No. of units sold COGS Portable 6200 15200 21400 2836000 132.52 14,400 1908336 Midsize 7900 19900 27800 9851800 354.38 23,200 8221646 Flat screen 3100 9700 12800 7551600 589.97 6,200 3657806 13787789 Sales 18937600 Cost of Good sold=BI+Purchases-EI 13787789 Gross Profit 5149811