Question

Please answer this question. The Income Statement is not complete

Received No. of Units Unit Cost 1,230 $2.90 1,120 3.00 Issued No. of Units Date May 1 (opening balance) Balance No. of Units 1,230 2,350 1,600 2,240 750 640 3.20 1,700 1,050 3.30 540 320 1,200 1,400 3.40 2,430 1,230 2,630 1,780 3,380 1,980 850 1,600 3.60 1,400

Based on results above, and assuming that the average selling price per unit during May was $7.25, prepare partial income statements up to the “gross profit on sales” line.

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Answer 1

Partial Income Statement (FIFO)
Sales (5,060 units × $7.25)		$36,685
Less: Cost of goods sold:
Beginning balance (1,230 units × $2.90)	$3,567
Add: Purchase	$19,393
Less: Ending Inventory	($7,052)	$15,908
Gross profit		$20,777

Units purchased	Unit price	Cost
1120	3	3360.00
640	3.2	2048.00
1050	3.3	3465.00
1400	3.4	4760.00
1600	3.6	5760.00
Total purchase		19393.00

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Partial Income Statement (Weighted Average)
Sales (5,060 units × $7.25)		$36,685
Less: Cost of goods sold:
Beginning balance (1,230 units × $2.90)	$3,567
Add: Purchase	$19,393
Less: Ending Inventory	($6,457.50)	$16,502.50
Gross profit		$20,182.50