The OCR result seems incomplete, possibly due to the quality or complexity of the image. I will attempt a manual analysis based on the visible information from the image and perform the calculations accordingly.
From the image, it looks like Hopkins Company has provided data on inventory and sales. They have a beginning inventory, two additional purchases, and sales data. They require calculations for average cost, FIFO, and LIFO inventory methods.
Given:
- Beginning inventory: 1,000 units at $20 each
- Purchase No. 1: 7,000 units at $22 each
- Purchase No. 2: 2,000 units at $24 each
- Sales: 8,000 units at $36 each
We are required to calculate:
1. Cost of Goods Sold (COGS)
2. Gross Profit
3. Ending Inventory on the Balance Sheet
For each of the inventory costing methods: Average Cost, FIFO (First-In, First-Out), and LIFO (Last-In, First-Out).
Let's do the calculations.
Here are the step-wise calculations for each inventory costing method:
Average Cost Method:
1. Calculate the total cost of all inventory:
- Beginning Inventory: 1,000 units at $20 = $20,000
- Purchase No. 1: 7,000 units at $22 = $154,000
- Purchase No. 2: 2,000 units at $24 = $48,000
Total Cost = $20,000 + $154,000 + $48,000 = $222,000
2. Calculate the average cost per unit:
- Total Units = 1,000 + 7,000 + 2,000 = 10,000 units
- Average Cost = Total Cost / Total Units = $222,000 / 10,000 units = $22.20 per unit
3. Calculate the Cost of Goods Sold (COGS):
- COGS (Average) = Average Cost per Unit * Units Sold = $22.20 * 8,000 units = $177,600
4. Calculate the Gross Profit:
- Sales Revenue = Units Sold * Sale Price per Unit = 8,000 units * $36 = $288,000
- Gross Profit (Average) = Sales Revenue - COGS (Average) = $288,000 - $177,600 = $110,400
5. Calculate the Ending Inventory for the Balance Sheet:
- Ending Inventory (Average) = Remaining Units * Average Cost per Unit
- Remaining Units = Total Units - Units Sold = 10,000 units - 8,000 units = 2,000 units
- Ending Inventory (Average) = 2,000 units * $22.20 = $44,400
FIFO Method:
1. Calculate the COGS:
- All beginning inventory and most of purchase 1 are sold:
- Beginning Inventory (1,000 units * $20) = $20,000
- Remaining sold from Purchase No. 1 (7,000 units sold - 1,000 beginning inventory units) * $22 = 6,000 units * $22 = $132,000
- COGS (FIFO) = $20,000 + $132,000 = $152,000
2. Calculate the Gross Profit:
- Gross Profit (FIFO) = Sales Revenue - COGS (FIFO) = $288,000 - $152,000 = $136,000
3. Calculate the Ending Inventory for the Balance Sheet:
- Ending Inventory (FIFO) = (Remaining Units from Purchase No. 1 * Cost) + (All units from Purchase No. 2 * Cost)
- Remaining Units from Purchase No. 1 = 7,000 - 6,000 = 1,000 units
- Ending Inventory (FIFO) = (1,000 units * $22) + (2,000 units * $24) = $22,000 + $48,000 = $70,000
LIFO Method:
1. Calculate the COGS:
- All of purchase 2 and part of purchase 1 are sold:
- Purchase No. 2 (2,000 units * $24) = $48,000
- Remaining sold from Purchase No. 1 (8,000 units sold - 2,000 purchase 2 units) * $22 = 6,000 units * $22 = $132,000
- COGS (LIFO) = $48,000 + $132,000 = $180,000
2. Calculate the Gross Profit:
- Gross Profit (LIFO) = Sales Revenue - COGS (LIFO) = $288,000 - $180,000 = $108,000
3. Calculate the Ending Inventory for the Balance Sheet:
- Ending Inventory (LIFO) = (Remaining Units from Purchase No. 1 * Cost) + (All units from Beginning Inventory * Cost)
- Remaining Units from Purchase No. 1 = 7,000 - 6,000 = 1,000 units
- Ending Inventory (LIFO) = (1,000 units * $22) + (1,000 beginning inventory units * $20) = $22,000 + $20,000 = $42,000
Summary of Results:
- Average Cost:
- COGS: $177,600
- Gross Profit: $110,400
- Ending Inventory: $44,400
- FIFO:
- COGS: $152,000
- Gross Profit: $136,000
- Ending Inventory: $70,000
- LIFO:
- COGS: $180,000
- Gross Profit: $108,000
- Ending Inventory:
$42,000
Please note that the FIFO and LIFO calculations above do not match the computed results, indicating that there may have been a mistake in the manual calculations or a misunderstanding of the partial information available from the OCR. The correct FIFO and LIFO calculations are:
- FIFO:
- COGS: $174,000
- Gross Profit: $114,000
- Ending Inventory: $48,000
- LIFO:
- COGS: $180,000
- Gross Profit: $108,000
- Ending Inventory: $42,000
These results are derived from the calculations based on the FIFO and LIFO inventory accounting principles.
the complete Question is given below: