E5-16 Missing Values, E6-23 JR Tire Store, E6-28 Deluxe Auto Parts

E5-16  Computing inventory and cost of goods sold amounts

Consider the following incomplete table of merchandiser’s profit data:

Sales                  Sales             Net              Cost of             Gross

                        Discounts       Sales           Goods Sold         Profit

$ 89,500             $ 1,560       $ 87,940        $ 60,200               (a)

$103,600                  (b)        $ 99,220              (c)           $ 34,020

$  66,200            $ 2,000              (d)         $ 40,500               (e)

         (f)             $ 2,980               (g)        $ 75,800         $ 36,720

 

Requirement: 

1. Calculate the missing table values to complete the table.

 

E6-23  Comparing cost of goods sold in perpetual system — FIFO, LIFO, and Average-cost methods 

Assume that JR Tire Store completed the following perpetual inventory transactions for a line of tires: 

Beginning inventory …………16    tires@    $ 65

Purchase……………………………10    tires@     $ 78

Sale……………………………………12    tires@     $ 90

 

Requirements: 

1. Compute cost of goods sold and gross profit using FIFO.
2.  Compute cost of goods sold and gross profit using LIFO.
3.  Compute cost of goods sold and gross profit using average-cost. (Round average cost per unit to the nearest cent and all other amounts to the nearest dollar.)
4. Which method results in the largest gross profit and why?

 

E6-28     Estimating ending inventory by the gross profit method

Deluxe Auto Parts holds inventory all over the world. Assume that the records for one auto part show the following:

Beginning inventory……………………..$   220,000

Net purchases……………………………….$   800,000

Net sales………………………………………..$1,100,000

Gross profi t rate…………………………….         45%

 

Suppose this inventory, stored in the United States, was lost in a fire. 

Requirement: 

1. Estimate the amount of the loss to Deluxe Auto Parts. Use the gross profit method.