Valix Finacc vol 1 Problem 7-21

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 7-21

                                                                      Purchases          Sales      Inventory increment

2006                                                                    5,000             4,000                1,000    

2007                                                                    9,000             7,000                2,000

2008                                                                 15,000            12,000               3,000

Total inventory – December 31, 2008 (units)                                                    6,000

Sales                                                                                                                        1,200,000

Cost of sales:

    Inventory – December 31, 2007 (3,000 x 60)                         180,000

    Purchases                                                                                      1,125,000

    Goods available for sale                                                               1,305,000

    Less: Inventory – December 31, 2008 (6,000 x 75)                              450,000          855,000

Gross income                                                                                                            345,000