Sample content EXERCISE 6-1 The correct inventory amount $351000 Ending inventory—physical count $297,000 1. No effect—title passes to purchaser upon shipment when terms are FOB shipping point 0 2. No effect—title does not transfer to Alou until goods are received 0 3. Add to inventory: Title passed to Alou when goods were shipped 19,000 4. Add to inventory: Title remains with Alou until purchaser receives goods 35,000 5. No effect – title passes to purchaser upon shipment when terms are FOB shipping point,     0 Correct inventory $351,000 EXERCISE 6-10 The ending inventory $26900 Cost Market Lower -of-Cost- or-Market: Cameras $ 6,800 $ 7,000 $ 6,800 DVD players 11,250 10,350 10,350 Ipods 10,000 9,750 9,750 Total inventory $28,050 $27,100 $26,900 EXERCISE 6-14 (a) Silver Company Gold Company Inventory Turnover $192,000 $292,000 ($47,000 + $55,000)/2 = 3.76 ($71,000 + $69,000)/2

1. ACC 557 Week 4 Chapter 6 (E6 1 E6 10 E6 14 P6 3A)
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Sample content
EXERCISE 6-1
The correct inventory amount $351000
Ending inventory—physical count $297,000

2. 1. No effect—title passes to purchaser upon shipment
when terms are FOB shipping point 0
2. No effect—title does not transfer to Alou until
goods are received 0
3. Add to inventory: Title passed to Alou when goods
were shipped 19,000
4. Add to inventory: Title remains with Alou until
purchaser receives goods 35,000
5. No effect – title passes to purchaser upon shipment
when terms are FOB shipping point, 0
Correct inventory $351,000
EXERCISE 6-10
The ending inventory $26900
Cost
Market
Lower
-of-Cost-
or-Market:
Cameras

3. $ 6,800
$ 7,000
$ 6,800
DVD players
11,250
10,350
10,350
Ipods
10,000
9,750
9,750
Total inventory
$28,050
$27,100
$26,900
EXERCISE 6-14
(a)
Silver Company
Gold Company
Inventory Turnover

4. $192,000
$292,000
($47,000 + $55,000)/2
= 3.76
($71,000 + $69,000)/2
= 4.17
Days in Inventory
365/3.76 = 97 days
365/4.17 = 88 days
(b) Gold Company is moving its inventory more quickly, since its inventory
turnover is higher, and its days in inventory is lower
PROBLEM 6-3A
REFER TO THE SCREENSHOT AT THE PAGE END FOR ANSWERS AS IN
WILEYPLUS
(a)
COST OF GOODS AVAILABLE FOR SALE
Date
Explanation
Units
Unit Cost

5. Total Cost
1/1
Beginning Inventory
400
$ 8
$ 3,200
2/20
Purchase
300
9
2,700
5/5
Purchase
500
10
5,000
8/12
Purchase
600
11

6. 6,600
12/8
Purchase
200
12
2,400
Total
2,000
$19,900
(b)
FIFO
(1)
Ending Inventory
(2)
Cost of Goods Sold
Date
Units
Unit Cost
Total Cost

7. Cost of goods available for sale
$19,900
12/8
200
$12
$2,400
Less: Ending inventory
5,700
8/12
300
11
3,300
500
$5,700
Cost of goods sold
$14,200
Proof of Cost of Goods Sold
Date
Units
Unit Cost

8. Total Cost
1/1
400
$ 8
$ 3,200
2/20
300
9
2,700
5/5
500
10
5,000
300
11
3,300
1,500
$14,200
(b)

9. LIFO
(1)
Ending Inventory
(2)
Cost of Goods Sold
Date
Units
Unit Cost
Total Cost
Cost of goods available for sale
$19,900
1/1
400
$8
$3,200
Less: Ending inventory
4,100
2/20
100
9

10. 900
500
$4,100
Cost of goods sold
$15,800
Proof of Cost of Goods Sold
Date
Units
Unit Cost
Total Cost
12/8
200
$12
$ 2,400
8/12
600
11
6,600
5/5

11. 500
10
5,000
2/20
200
9
1,800
1,500
$15,800
AVERAGE-COST
(1)
Ending Inventory
(2)
Cost of Goods Sold
$19,900 ÷ 2,000 = $9.95
Cost of
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