# Vaughn Company, which uses a periodic inventory system

Question # 00003811 Posted By: expert-mustang Updated on: 11/20/2013 10:39 PM Due on: 11/21/2013
Subject Accounting Topic Accounting Tutorials:
Question

1) Vaughn Company, which uses a periodic inventory system, had a beginning inventory on May 1, of 400 units of Product A at a cost of \$7 per unit. During May, the following purchases and sales were made.

Purchases
May 6 --------375 units at \$9
May 14-------- 250 units at \$10
May 21 ------- 300 units at \$11
May 28 ------- 452 units at \$13
---------------- 1350 ----------

Sales
May 4 --------- 275 units
May 8 --------- 300 units
May 22-------- 400 units
May 24 -------- 225 units
-----------------1200----

Instructions: Compute the May 31 ending inventory and May cost of goods sold under (a) Average Cost, (b) FIFO, and (c) LIFO. Provide appropriate supporting calculations.

(a) Average – Ending Inventory = \$_________;
Cost of Goods Sold = \$_________.

(b) FIFO – Ending Inventory = \$_________;
Cost of Goods Sold = \$_________.

(c) LIFO – Ending Inventory = \$_________;
Cost of Goods Sold = \$_________.

Part 2 Which of the following accounts should be closed with a debit or a credit to Income Summary at the end of the fiscal year? If it is not closed to Income

Summary, mark as n/a.

1. Sales
2. Cost of Goods Sold
3. Accumulated Depreciation
4. Merchandise Inventory
5. Sales Returns and Allowances
6. H. Denton, Drawing
7. Freight-out
8. Sales Discounts
9. JInterest Expense
10. H. Denton, Capital

--------------------------------------------------------------------------------

Beginning of the year
Total Assets = \$85,000
Total Liabilities = ???
Total Owner's Equity = 35,000

End of the Year
Total Assets = \$90,000
Total Liabilities = 40,000
Total Owner's Equity = ???

Owner's Equity Changes During the year
Investments = \$12,000
Drawings = 20,000
Revenues = 80,000
Expenses = ???

---------------------------------------...

2)Calculate B. Petry company's 2010 net income.

B. Petry, Capital—January 1, 2010 = \$125,000
B. Petry, Capital—December 31, 2010 = 160,000
Petry investments during 2010 = 20,000

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1. ## Solution: Vaughn Company, which uses a periodic inventory system

Tutorial # 00003610 Posted By: expert-mustang Posted on: 11/20/2013 10:39 PM
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