After downloading the Excel form on this page, follow the instructions provided below to create your own worksheet version of Review Problem 1 in the text on pages 255-256. Enter formulas in the cells that contain question marks. For example, in cell B26 enter the formula "= B17".
Important notes:
- This worksheet assumes that the beginning inventory in Year 1 is always zero. If this were not true, the worksheet would have to be modified to include the cost of beginning inventory.
- When constructing the worksheet, keep in mind that this chapter assumes a LIFO inventory flow assumption. Because of this, you will need to use an IF statement in cell C41. The cost of goods sold under absorption costing in Year 2 will depend on whether production exceeds sales or sales exceeds production. When production exceeds sales, LIFO assumes that the cost of goods sold includes only units produced in Year 2 and the cost of goods sold should be computed using only the unit product cost from Year 2. When sales exceeds production, LIFO assumes that all of the production of Year 2 is sold and then any additional units are taken out of the beginning inventory. Therefore, when sales exceeds production, the cost of goods sold in Year 2 is a mixture of Year 1 unit product costs and Year 2 unit product costs.
After entering formulas in all of the cells that contained question marks, verify that the dollar amounts match the numbers in Review Problem 1.
Once you have verified that your worksheet matches the Review Problem, return to the textbook and complete the requirements as assigned by your instructor.
 Chapter 06 Applying Excel Forms
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