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Cae08 - Activity Chapter 2

This document contains 5 solutions to cost accounting problems involving calculations of cost of goods sold. Each solution shows the calculations using inventory accounts to determine the cost of goods sold for a merchandising company based on information provided about beginning inventory, purchases/manufacturing costs, and ending inventory for a given period.

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Jr Villariez
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777 views

Cae08 - Activity Chapter 2

This document contains 5 solutions to cost accounting problems involving calculations of cost of goods sold. Each solution shows the calculations using inventory accounts to determine the cost of goods sold for a merchandising company based on information provided about beginning inventory, purchases/manufacturing costs, and ending inventory for a given period.

Uploaded by

Jr Villariez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ACTIVITY CAE08: COST ACCOUNTING AND CONTROL

ACTIVITY CHAPTER 2

RIVERA, KIM JEAN V.


20195683
BSA
OL22E46

DIRECTIONS:
Show your solution on POST TEST in good form.

Solution 1

Gabrio Inc. is a merchandising company. Last month the company's


merchandise purchases totaled $87,000. The company's beginning
merchandise inventory was$19,000 and its ending merchandise inventory
was $11,000. What was the company’s cost of goods sold for the month?

A)$79,000
B)$87,000
C)$95,000
D)$117,000

SOLUTION:

Merchandise inventory, beginning......................................$19,000


Add: Merchandise purchased.............................................. 87,000
Goods available for sale......................................................106,000
Deduct: Finished goods inventory, ending......................... 11,000
Cost of goods sold...............................................................$ 95,000

1
Solution 2

At the beginning of the most recent month’s operations, finished goods


inventory was $30,000. The cost of goods manufactured was $326,000 and
ending finished goods inventory was $42,000. What was the cost of goods
sold for the month?

A)$320,000
B)$338,000
C)$314,000
D)Cannot be calculated

SOLUTION:

Finished goods inventory, beginning…………………………….$30,000


Add: Cost of goods manufactured……………………………….. 326,000
Goods available for sale………………………………………………356,000
Deduct: Finished goods inventory, ending……………………. 42,000
Cost of goods sold………………………………………………………$314,000

Solution 3

Haala Inc. is a merchandising company. Last month the company’s cost of


goods sold was $68,000. The company’s beginning merchandise inventory
was $11,000 and it sending merchandise inventory was $17,000. What was
the total amount of the company’s merchandise purchases for the month?

A)$96,000
B)$62,000
C)$68,000
D)$74,000

SOLUTION:

Merchandise inventory, beginning………………………………..$11,000


Add: Merchandise purchased………………………………………. ?
Goods available for sale………………………………………………?
Deduct: Finished goods inventory, ending……………………. 17,000
Cost of goods sold………………………………………………………$68,000
2
Goods available for sale = $68,000 + $17,000
Goods available for sale = $85,000

Merchandise purchased = $85,000 – Merchandise inventory, beginning


Merchandise purchased = $85,000 − $11,000
Merchandise purchased = $74,000

Solution 4

The cost of goods manufactured for October at Toule Manufacturing


Corporation was $907,000. The following changes occurred in Toule inventory
accounts during October:

Decrease in raw materials inventory……….$24,000


Decrease in work in process inventory……$17,000
Increase in finished goods inventory………$38,000

What was Toule’s cost of goods sold for October?


A)$869,000
B)$886,000
C)$928,000
D)$945,000

SOLUTION:

Beginning finished Cost of goods Ending finished Cost of


goods inventory + manufactured – goods inventory = goods sold

REARRANGING

Cost of goods Beginning finished Ending finished Cost of


Manufactured + ( goods inventory – goods inventory ) = goods
sold

Cost of goods
$907,000 + ( - $38,000) = sold

$869,000

3
ACTIVITY

Solution 5

During July, the cost of goods manufactured at Xxis Corporation was $70,000.
The beginning finished goods inventory was $19,000 and the ending finished
goods inventory was $15,000. What was the cost of goods sold for the month?

A)$104,000
B)$74,000
C)$70,000
D)$66,000

Finished goods inventory, beginning…………………………….$19,000


Add: Cost of goods manufactured……………………………….. 70,000
Goods available for sale………………………………………………89,000
Deduct: Finished goods inventory, ending……………………. 15,000
Cost of goods sold………………………………………………………$74,000

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