Determining Cost of Goods Sold and Inventory Methods

Best Buy (BBY) Cost of Goods Sold

Determining Cost of Goods Sold For a recent year, Best Buy (BBY) reported sales of $39,528 million. Its gross profit was $9,191 million. What was the amount of Best Buy's cost of goods sold? (Enter answer in millions.) FIFO and LIFO Costs Under Perpetual Inventory System The following units of an item were available for sale during the year:
Beginning inventory 22 units at $41
Sale 19 units at $57
First purchase 36 units at $43
Sale 17 units at $57
Second purchase 28 units at $46
Sale 25 units at $58

The firm uses the perpetual inventory system, and there are 25 units of the item on hand at the end of the year.
a. What is the total cost of the ending inventory according to FIFO?
b. What is the total cost of the ending inventory according to LIFO?
Lower-of-Cost-or-Market Method
On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item, as shown in Exhibit 10.
Item Inventory Quantity Cost per Unit
Market Value per Unit
(Net Realizable Value)
JFW1 109 $38 $42
SAW9 226 19 17

Purchases Transactions
Rolfes Company purchased merchandise on account from Springhill Company for $7,900, terms 1/10, n/30. Rolfes returned merchandise with an invoice amount of $2,000 and received full credit.
5. EX.05.04
6. EX.06.02
7. BE.06.02.ALGO (Algorithmic)
a. If Rolfes Company pays the invoice within the discount period, what is the amount of cash required for the payment? If required, round the answer to the nearest dollar.
b. What account is debited by Rolfes Company to record the return?

Purchase-Related Transactions
The Stationery Company purchased merchandise on account from a supplier for $14,500, terms 2/10, n/30. The  Stationery Company returned merchandise with an invoice amount of $3,500 and received full credit.
a. If The Stationery Company pays the invoice within the discount period, what is the amount of cash required for the payment?
b. Under a perpetual inventory system, what account is credited by The Stationery Company to record the return? Control of Inventories Hardcase Luggage Shop is a small retail establishment located in a large shopping mall. This shop has implemented
the following procedures regarding inventory items:
a. Because the shop carries mostly high-quality, designer luggage, all inventory items are tagged with a control device that activates an alarm if a tagged item is removed from the store.
b. Because the display area of the store is limited, only a sample of each piece of luggage is kept on the selling floor. Whenever a customer selects a piece of luggage, the salesclerk gets the appropriate piece from the store’s stockroom. Because all salesclerks need access to the stockroom, it is not locked. The stockroom is adjacent to the break room used by all mall employees.
c. Whenever Hardcase receives a shipment of new inventory, the items are taken directly to the stockroom.Hardcase’s accountant uses the vendor’s invoice to record the amount of inventory received.Determine whether each of these procedures is appropriate or inappropriate and select the response below.
Perpetual Inventory Using FIFO
Beginning inventory, purchases, and sales for Item Zeta9 are as follows:
Oct. 1 Inventory 65 units @ $24
8. EX.05.01
9. BE.06.05.ALGO (Algorithmic)
10. EX.05.06
7 Sale 50 units
15 Purchase 49 units @ $26
24 Sale 22 units

Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of goods sold on October 24 and (b) the inventory on October 31.
a. Cost of goods sold on October 24 $
b. Inventory on October 31 $
Determining Gross Profit
During the current year, merchandise is sold for $8,100,000. The cost of the goods sold is $4,698,000

a. What is the amount of the gross profit?
b. Compute the gross profit percentage (gross profit divided by sales).
c. Will the income statement always report a operating income?

Periodic Inventory Using FIFO, LIFO, and Weighted Average Cost Methods The units of an item available for sale during the year were as follows:
Jan. 1 Inventory 13 units at $42 $546
Aug. 13 Purchase 9 units at $43 387
Nov. 30 Purchase 15 units at $44 660
Available for sale 37 units $1,593

There are 18 units of the item in the physical inventory at December 31. The periodic inventory system is used Determine the inventory cost using the (a) first-in, first-out (FIFO) method; (b) last-in, first-out (LIFO) method; and (c) weighted average cost method (round per-unit cost to two decimal places and your final answer to the nearest whole dollar).
a. First-in, first-out (FIFO) $
b. Last-in, first-out (LIFO) $
c. Weighted average cost $
Purchase-Related Transactions
11. BE.05.01.ALGO (Algorithmic)
12. BE.06.04.ALGO (Algorithmic).