Q1. Average-Cost Method: Perpetual Inventory System
Assume the following data with regard to inventory for Vegan Company:
|
Aug. 1
|
Inventory
|
40 units @ $10 per unit
|
$ 400
|
|
8
|
Purchase
|
50 units @ $11 per unit
|
550
|
|
22
|
Purchase
|
35 units @ $12 per unit
|
420
|
|
Goods available for sale
|
125 units
|
$1,370
|
|
Aug. 15
|
Sale
|
45 units
|
|
|
28
|
Sale
|
25 units
|
|
|
Inventory, Aug. 31
|
55 units
|
|
Required - Calculate the cost of ending inventory and cost of goods sold according to the average-cost method under the perpetual inventory system. In your calculations round average unit cost to the nearest cent and round all other calculations and your final answers to the nearest dollar.
Q2. LIFO Method: Perpetual Inventory System
Assume the following data with regard to inventory for Vegan Company:
|
Aug. 1
|
Inventory
|
40 units @ $10 per unit
|
$ 400
|
|
8
|
Purchase
|
50 units @ $11 per unit
|
550
|
|
22
|
Purchase
|
35 units @ $12 per unit
|
420
|
|
Goods available for sale
|
125 units
|
$1,370
|
|
Aug. 15
|
Sale
|
45 units
|
|
|
28
|
Sale
|
25 units
|
|
|
Inventory, Aug. 31
|
55 units
|
|
Calculate the cost of ending inventory and cost of goods sold according to the LIFO method under the perpetual inventory system.
Q3. Short-Term Liquidity Ratios
Wellman Company has cash of $80,000, net accounts receivable of $180,000, and net sales of $1,440,000. Last year's net accounts receivable were $140,000. Compute the following ratios: (Round days' sales uncollected answer to nearest whole day. Assume 365 days in a year.)