Question

The records of Cordova Corp. showed the following transactions, in the order given, relating to the major inventory item: Units 4,000 8,000 5,500 7,000 12,000 14,000 12,000 8,000 Unit Cost 1. Inventory $ 8.60 2. Purchase 3. Sale (at $18.40) 4. Purchase 5. Sale (at $18.40) 6. Purchase 7. Sale (at $21.40) 8. Purchase 8.90 9.20 9.36 9.50 Required: Complete the following schedule for each independent assumption. (Round unlt costs to the nearest cent.) Units and Amounts Cost of Goods Sold Gross Margin Ending Inventory Independent Assumptions FIFO a. b. Weighted average, periodic inventory system c Moving average, perpetual inventory system

Answer 1

FIFO Particulars Units Purchases Units Unit Cost Amount 4000 $ 8.60 $ 34,400.00 8000 $ 8.90 $ 71,200.00 Cost og goods Sold Unit Cost Amount 0 $ - $ $ - $ 1 Opening Inventory 2 Purchases 0 - Balance Units Unit Cost Amount 4000 $ 7.60 $ 30,400.00 4000 $ 7.60 $ 30,400.00 8000 $ 8.90 $ 71,200.00 12000 $ 1,01,600.00 6500 $ 8.90 $ 57,850.00 Closing Value 3 Sales 0 $ - $ . 4000 $ 1500 $ 0 $ 8.60 8.90 - $ $ $ 34,400.00 13,350.00 - 4 Purchase 7000 $ 9.20 $ 64,400.00 Closing Value 5 Sales 6500 $ 7000 $ 13500 1500 $ 8.90 $ 57,850.00 9.20 $ 64,400.00 $ 1,22,250.00 9.20 $ 13,800.00 0 $ . $ . 6500 $ 5500 $ 0 $ 8.90 $ 9.20 $ - S 57,850.00 50,600.00 6 Purchases 14000 $ 9.36 $1,31,040.00 9.20 9.36 1500 $ 14000 $ 15500 3500 $ $ 13,800.00 $ 1,31,040.00 $ 1,44,840.00 $ 32,760.00 Closing Value 7 Sales 0 $ - $ 9.36 1500 $ 10500 $ 0 $ 9.20 $ 13,800.00 9.36 $ 98,280.00 - $ 8 Purchases 8000 $ 9.50 $ 76,000.00 3500 $ 8000 $ 11500 9.36 $ 32,760.00 9.50 $ 76,000.00 $ 1,08,760.00 Closing Value Cost of Units Sold 29500 $ 2,68,280.00

WEIGHTED AVERAGE PERIODIC INVENTORY Weighted Average Unit Cost Units Unit Cost Total 1 Opening Inventory 4000 8.6 34400 2 Purchases 8000 8.9 71200 3 Purchases 7000 9. 2 64400 4 Purchases 14000 9.36 131040 5 Purchases 8000 9.5 76000 41000 9.2 377040

M . Particulars Moving Average Perpetual Inventory System Purchases Cost og goods Sold Units Unit Cost Amount Units Unit Cost Amount 4000 $ 8.60 $ 34,400. 00 0 $ - $ 8000 $ 8.90 $ 71,200.00 0 $ - - 1 Opening Inventory 2 Purchases Closing Value 3 Sales 4 Purchase 0 $ 7000 $ - 9.20 $ $ 64,400.00 0 $ - $ Balance Units Unit Cost Amount 4000 $ 7.60 $ 30,400.00 4000 $ 7.60 $ 30,400.00 8000 $ 8.90 $ 71,200.00 12000 $ 8.47 $ 1,01,600.00 6500 $ 8.47 $ 55,033.33 | 6500 $ 8.47 $ 55,033.33 7000 $ 9.20 $ 64,400.00 13500 $ 8.85 $ 1,19,433.33 1500 $ 8.85 $ 13,270.37 1500 $ 8.85 $ 13,270.37 14000 $ 9.36 $ 1,31,040.00 15500 $ 9.31 $ 1,44,310.37 3500 $ 9.31 $ 32,586.21 3500 $ 9.31 $ 32,586.21 8000 $ 9.50 $ 76,000.00 11500 $ 9.44 $ 1,08,586.21 Closing Value 5 Sales 6 Purchases $ 1,06,162.96 0 $ 14000 $ - 9.36 $ - $1,31,040.00 12000 $ 0 $ 8.85 - Closing Value 7 Sales 8 Purchases 0 $ 8000 $ - 9.50 $ $ - 76,000.00 12000 $ 0 $ 9.31 $ 1,11,724.16 - Closing Value Cost of Units Sold 29500 $ 2,64,453.79

Units 1 Sales 2 Sales 3 Sales Total Value of sales Price 5500 12000 12000 29500 18.4 18.4 21.4 Value 101200 220800 256800 578800 Sales FIFO $ 5,78,800.00 WEIGHTED AVERAGE $5,78,800.00 MOVING AVERAGE $5,78,800.00 Closing Inventory COGS $ 1,08,760.00 $ 2,68,280.00 $ 1,05,800.00 $ 2,71,400.00 $ 1,08,586.21 $ 2,64,453.79 Gross Margin $3,10,520.00 $3,07,400.00 $ 3,14,346.21