Question

Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from kayaking, rain, fishing, or even diving up to 100 feet won’t damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2022. All watches are sold for $499 each. Jul. 17 Purchased 49 watches for $7,301 ($149 per watch) on account. Jul. 31 Sold 39 watches for $19,461 cash. Aug. 12 Purchased 39 watches for $6,201 ($159 per watch) cash. Aug. 22 Sold 29 watches for $14,471 on account. Sep. 19 Paid for watches purchased on July 17. Sep. 27 Receive cash of $15,600 for watches sold on account on August 22. Oct. 27 Purchased 79 watches for $13,351 ($169 per watch) cash. Nov. 20 Sold 89 watches for $44,411 cash. Dec. 4 Purchased 118 watches for $21,122 ($179 per watch) on account. Dec. 8 Sold 39 watches for $19,461 on account. Great Adventures Problem AP6-1 Part 1 Required: 1-a. Calculate sales revenue, cost of goods sold, and ending inventory as of December 31, 2022, assuming Suzie uses FIFO to account for inventory.

Answer 1

	Purchases			Cost of goods sold			Inventory on Hand
Date	Unit	Unit cost	Total cost	Unit	Unit cost	Total cost	Unit	Unit cost	Total cost
Jul 17	49	$149	$7301				49	$149	$7301
Jul 31				39	$149	$5811	10	$149	1490
Aug 12	39	$159	6201				10	$149	1490
							39	$159	6201
Aug 22				10	$149	1490
				19	$159	3021	20	$159	3180
Oct 27	79	$169	13351				20	$159	3180
							79	$169	13351
Nov 20				20	$159	3180
				69	$169	11661	10	$169	1690
Dec 4	118	$179	21122				10	$169	1690
							118	$179	21122
Dec 8				10	$169	1690
				29	$179	5191	89	$179	15931
						$32044			$15931

Sales revenue= $19461+14471+44411+19461= $97804

Sales revenue	$97804
Cost of goods sold	$32044
Ending inventory	$15931

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