Current Liabilities _____ 10. Accounts Receivable + Inventory Turnover Turnover in Days in Days _____ 11. Cost of Goods Sold Average Inventory _____ 12. Ending Inventory Cost of Goods Sold/365 ANS: 1. l 2. b 3. h 4. j 5. a 6. c 7. f 8. k 9. i 10. g 11. e 12. d 12. The following are the inventory records of the Garret Company: Units Cost Total January 1 40 $12 $480 Purchases: February 10 20 13 260 July 15 40 14 560 November 1 50 15 750 December 10 30 16 480 Available 180 $2,530 Ending inventory consists of 30 units from the July purchase. Note: The company uses a periodic inventory system. Required: Calculate ending inventory and cost of sales, using: (a) FIFO, (b) LIFO, (c) average, and (d) specific identification. ANS: a. FIFO Ending Inventory Cost of Sales $2,530 - $480 = $2,050 30 $16 = $480  b. LIFO Ending Inventory Cost of $2,530 - $360 = $2,170 30 $12 = $360 
Current Liabilities _____ 10. Accounts Receivable + Inventory Turnover Turnover in Days in Days _____ 11. Cost of Goods Sold Average Inventory _____ 12. Ending Inventory Cost of Goods Sold/365 ANS: 1. l 2. b 3. h 4. j 5. a 6. c 7. f 8. k 9. i 10. g 11. e 12. d 12. The following are the inventory records of the Garret Company: Units Cost Total January 1 40 $12 $480 Purchases: February 10 20 13 260 July 15 40 14 560 November 1 50 15 750 December 10 30 16 480 Available 180 $2,530 Ending inventory consists of 30 units from the July purchase. Note: The company uses a periodic inventory system. Required: Calculate ending inventory and cost of sales, using: (a) FIFO, (b) LIFO, (c) average, and (d) specific identification. ANS: a. FIFO Ending Inventory Cost of Sales 30  $16 = $480 $2,530 - $480 = $2,050 b. LIFO Ending Inventory Cost of 30  $12 = $360 $2,530 - $360 = $2,170
Ch06%20Liquidity%20of%20short%20term%20asset.docx