Eddiline C.

Umali September 8, 2017

BSBM211 Prof Pablito L. Sebua

Accounting 1

CASE A
1. Sales* 72,500
Cost of Sales** (29,000)
Gross Profit 43,500
Operating Expense (20,500)
Operating Income 23,000

*Sales:
August 14,2017 (150 x 150) 22,500
August 24,2017 (200 x 250) 50,000
72,500
**Cost of Sales:
150 units x 75 11,250
50 units x 75 3,750
50 units x 80 4,000
100 units x 100 10,000
29,000

2. Using Periodic:
A. Beginning Inventory (FIFO)
200 at 75 15,000
B. Ending Inventory (FIFO)
August 31 shows 100 units on hand:
From August 24 purchase (100 units at 70) 7,000

Using Perpetual: Stock Card for August, 2017

DATE RECEIVED ISSUED BALANCE

8/1 200 at 75 15,000 (Beginning Inventory)

8/5 50 at 80 200 at 75 15,000

50 at 80 4,000

8/14 150 at 75 50 at 75 3,750

50 at 80 4,000
8/24 170 at 100 50 at 75 3,750
50 at 80 4,000
170 at 100 17,000
8/31 50 at 75
50 at 80
100 at 80 70 at 100 7,000 (Ending Inventory)
CASE B
 1. Beginning Inventory 500,000
Purchases 400,000
Purchase Discount (25,000)
Goods Available for Sale 875,000

2. Beginning Inventory 500,000

Purchases 400,000
Purchase Discount (25,000)
Goods Available for Sale 875,000
Ending Inventory (SQUEEZE) (335,000)
Cost of Goods Sold (900,000-360,000) 540,000

CASE C

1. Beginning Inventory 500,000

Purchases 850,500
Goods Available for Sale 1,350,000
Ending Inventory (900,000)
Cost of Goods Sold 450,000

2. Gross Margin
Sales 1,000,000
Cost of Goods Sold (450,000)
Gross Margin 550,000

Gross Margin Ratio = 550,000

1,000,000

Gross Margin Ratio = 55%