"14. Assume in problem 13 that Convex used LIFO accounting instead of FIFO. What wouldgross profit be? What is the value of ending inventory?4-14. Solution:Convex Mechanical Supplies (Continued) Sales (17,000 @ $20) $340,000 Cost of goods sold:New inventory:Quantity (units) ...............15,000 Cost per unit .................... $ 16 Total ................................... $240,000Old inventory:Quantity (units) ...............2,000 Cost per unit .................... $ 12 Total ................................... $24,000Total cost of goods sold ..................................$264,000 Gross profit ........................$76,000 Value of ending inventory: Beginning inventory$60,000(5,000 × $12) ................... + Total production $240,000(15,000 × $16) .................Total inventory available for sale .............. $300,000– Cost of good sold ............... $264,000Ending inventory ............... $36,000OR 3,000 units × $12 = $36,000S4-13 15. Jerrico Wallboard Co. had a beginning inventory of 7,000 units on January 1, 2008.The costs associated with the inventory were:Material .........................$9.00 unitLabor .............................5.00 unitOverhead .......................4.10 unitDuring 2008, Jerrico produced 28,500 units with the following costs:Material .........................$11.50 unitLabor .............................4.80 unitOverhead .......................6.20 unitSales for the year were 31,500 units at $29.60 each. Jerrico uses LIFO accounting. Whatwas the gross profit? What was the value of ending inventory?S4-14 4-15. Solution:Jerrico Wallboard Co. Sales (31,500 @ $29.60) $932,400 Cost of goods sold:New inventory:Quantity (units) .................28,500 Cost per unit ......................$22.50 Total .................................... $641,250Old inventory:Quantity (units) .................3,000 Cost per unit ......................$18.10 Total .................................... $54,300Total cost of goods sold ....................................$695,550 Gross profit ..........................$236,850 Value of ending inventory:Beginning inventory $126,700(7,000 × $18.10) ................+ Total production$641,250 (28,500 × $22.50) ............Total inventory available for sale ...............$767,950 – Cost of good sold ............. $695,550Ending inventory ................. $72,400OR 4,000 units × $18.10 = $72,400S4-15 16. J. Lo’s Clothiers has forecast credit sales for the fourth quarter of the year as:September (actual) ............................. $70,000Fourth QuarterOctober .............................................. $60,000November .......................................... 55,000December .......................................... 80,000Experience has shown that 30 percent of sales are collected in the month of sale, 60 percentin the following month, and 10 percent are never collected.Prepare a schedule of cash receipts for J. Lo’s Clothiers covering the fourth quarter(October through December).4-16. Solution:J. Lo’s Clothiers September October November DecemberCredit sales $70,000 $60,000 $55,000 $80,00030% Collectedin month of 18,000 16,500 24,000sales60% Collectedin month after 42,000 36,000 33,000salesTotal cashreceipts $60,000 $52,500 $57,000S4-16 17. Victoria’s Apparel has forecast credit sales for the fourth quarter of the year as:September (actual) ............................. $50,000Fourth QuarterOctober .............................................. $40,000November .......................................... 35,000December .......................................... 60,000Experience has shown that 20 percent of sales are collected in the month of sale, 70 percentin the following month, and 10 percent are never collected.Prepare a schedule of cash receipts for Victoria’s Apparel covering the fourth quarter(October through December).4-17. Solution:Victoria’s Apparel September October November DecemberCredit sales $50,000 $40,000 $35,000 $60,00020% Collectedin month of 8,000 7,000 12,000sales70% Collectedin month after 35,000 28,000 24,500salesTotal cashreceipts $43,000 $35,000 $36,500S4-17 "