ACCOUNTING QUESTION

- anonymous

ACCOUNTING QUESTION

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- anonymous

Are you A counting the question HARHARHAR.

- anonymous

The calculations in the attachment are correct but I don't understand how my teacher got them. Someone explain please?

- anonymous

##### 1 Attachment

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- anonymous

##### 1 Attachment

- anonymous

The numbers from the 2nd attachment are from the 1st

- anonymous

@juanitam

- anonymous

hi

- anonymous

HI!!!

- anonymous

Am I clear enough with what I'm asking?

- anonymous

ok where do you want to start. I see lifo /ending inventory

- anonymous

I have a worksheet that begins with the info given to me in the first attachment. I understood how my teacher got all of the other calculations (average, periodic fifo & lifo, and perpetual fifo) but I do not understand how she got the calculations she got in my second attachment for perpetual lifo.

- anonymous

and by periodic and perpetual, i mean inventory systems used by the company.

- anonymous

kk - working out now

- anonymous

ok. let me know if you need anything else clarified.

- anonymous

sso you just need to know how she did the 2nd attachment?

- anonymous

1. cgs at LIFO
3/5 sold 5 - so that means used all of the 4 on 3/4 purchase and 1 of the beg inventory
=4*14 + 1 * 12 = 68
3/24 sold 2 - so that means last in was 2 * 15 = 30
total cgs = 98
in order to do this you must look at each sold date based on the inventory that you have on hand

- anonymous

2. value of inventory
Beg +8 * 12 sold 1 on 3/5 purchase
3/4 +4* 14 sold on 3/5 purchase
3/18 +11 * 15 sold 2 on 3/24 purchase
left with
7 * 12 = 84
9 * 15 = 135
total of 219

- anonymous

3. gross profit
based on sells less cgs (calculated 1 above)
sells
5 *25 = 125
2 * 30 = 60
total sales 185
less cgs - 98
GP is 87

- anonymous

yeah. i have all the numbers but i want to know why those numbers were used.

- anonymous

read what i wrote and see if you still have questions

- anonymous

i think you have some of the dates wrong above

- anonymous

cgs is based on using the last inventory in for the current sale
so on 3/10 they sold 5
well she had 8 from beg and 4 from purchase on 3/4
so you use 4 on last sale and 1 from beginning

- anonymous

agreed on dates - but you still should be able to follow what i did - let m know if you need to me re-explain it

- anonymous

ok you can move on to someone else that needs assistance. ill let you know if i need more help.

- anonymous

I think I need the first part explained with words. Everything else makes sense based on the numbers from cost of goods sold.
I mainly don't understand why we use a 2 to multiply 15.

- anonymous

easy - she sold on 3/24 2 right?
well using LIFO premises
what was the latest inventory that came in?

- anonymous

11?

- anonymous

Idk Im not too keen on this stuff yet although its not too complicated.

- anonymous

right and you only need 2 of those
so 2 * 15 (cost of those items)
you are doing good - trust me deeper you go into accounting harder it gets. Not all about math :)

- anonymous

then why isnt the other one 5 times 12

- anonymous

5 were sold

- anonymous

because you have to look at the LAST IN - FIRST OUT

- anonymous

the last in on the first sell was 4 @ 14
but you sold 5
so you had to use all 4 @ 14 PLUS
1 from beginning @ 12

- anonymous

oh it kinda makes sense now lol

- anonymous

thanks. :)
gave you some more medals for the help.

- anonymous

let me know if you have other questions.

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