Question

ABC Company had the following balances and transactions during 2009. Beginning inventory 10 units at $70...

ABC Company had the following balances and transactions during 2009. Beginning inventory 10 units at $70 per unit March 6 purchased 9 units for $71 per unit March 10 sold 8 units for $100 per unit June 10 purchased 20 units for $81 per unit October 30 sold 15 units for $100 per unit Operating expenses for 2009 was $345 in total. What is total operating income for 2009 if the perpetual FIFO costing method is used?

Homework Answers

Answer #1

Calculation of Inventory at year End:-

Particular Purchases Sales Balances

Date    Activity

01/03/2009 Begning Inventory

06/03/2009 Purchase

10/03/2009 Sales

09/06/2009 Purchases

30/10/2009

Units Unit Cost Total Cost

10 $70 $700

9    $71    $639

20 $81    $1620

-

Units Unit Cost Total Cost

-

-

8    100    800

-

15 $100 $1500

Unit Units Cost Total Cost

10    $70 $700

10    $70 $700

9 $71 $639

2    $70 $140

9    $71 $639

2    $70 $140

9    $71    $639

20 $81 $1620

16    $81    $1296

Calculation of Operating Income for 2009:-

Closing Stock=    $1296

Sales(1500+800)=$2300

Less:-Purchases=$2259

(1620+639)

Less:-Opening Stock=$700

Less:-Operating Expenses=$345

Operating Income=$292

Note :-Take figures from Table

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