Question

This is a recovered file that is temporarily stored on your computer. Save Problem 12: Alvin Company follows perpetual inventory method. The purchase and sales data are presented below. Date Explanation Beginning Inventory 1-Jan 10-Jan # of Units 4,000 2,000 Sale 17-Jan Purchase Cost/Price $5.50 $20.00 $6.00 $7.00 $25.00 $8.00 $30.00 Total $22,000 $40,000 $6,000 $21,000 $37,500 $24,000 $90,000 1,000 3,000 1,500 3,000 3,000 30-Mar Purchase 15-Apr Sale 15-Oct Purchase 10-Nov Sale You are required to calculate to calculate: (I) Cost of Goods Sold (II) Cost of Ending Inventory (III) Gross Profit Percentage (IV) Comparison of cost flow methods Answer the questions using (1) AVERAGE, (II) FIFO, and (III) LIFO method. Recovered

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan							4000	5.5	22000
10-Jan				2000	5.5	11000	2000	5.5	11000
17-Jan	1000	6	6000				2000	5.5	11000
							1000	6	6000
30-Mar	3000	7	21000				2000	5.5	11000
							1000	6	6000
							3000	7	21000
15-Apr				1500	5.5	8250	500	5.5	2750
							1000	6	6000
							3000	7	21000
15-Oct	3000	8	24000				500	5.5	2750
							1000	6	6000
							3000	7	21000
							3000	8	24000
10-Nov				500	5.5	2750
				1000	6	6000	1500	7	10500
				1500	7	10500	3000	8	24000
TOTAL	7000		51000	6500		38500	4500		34500
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL LIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan							4000	5.5	22000
10-Jan				2000	5.5	11000	2000	5.5	11000
17-Jan	1000	6	6000				2000	5.5	11000
							1000	6	6000
30-Mar	3000	7	21000				2000	5.5	11000
							1000	6	6000
							3000	7	21000
15-Apr				1500	7	10500	2000	5.5	11000
							1000	6	6000
							1500	7	10500
15-Oct	3000	8	24000				2000	5.5	11000
							1000	6	6000
							1500	7	10500
							3000	8	24000
10-Nov				3000	8	24000	2000	5.5	11000
							1000	6	6000
							1500	7	10500
TOTAL	7000		51000	6500		45500	4500		27500
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL WEIGHTED AVERAGE METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan							4000	5.5	22000
10-Jan				2000	5.5	11000	2000	5.5	11000
17-Jan	1000	6	6000				2000	5.5	11000
							1000	6	6000
Average							3000	5.67	17000
30-Mar	3000	7	21000				3000	5.67	17000
							3000	7	21000
Average							6000	6.33	38000
15-Apr				1500	6.33	9500	4500	6.33	28500
15-Oct	3000	8	24000				4500	6.33	28500
							3000	8	24000
Average							7500	7	52500
10-Nov				3000	7	21000	4500	7	31500
TOTAL	7000		51000	6500		41500	4500		31500
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