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Inventory Project i Saved Help Save & Exit Submit Check my work Required information [The following information applies to the questions displayed below.) Part 3 of 4 Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. points Date Activities Units Sold at Retail Mar. Beginning inventory Mar. 5 Purchase Units Acquired at Cost 100 units@ $50.00 per unit 400 units@ $55.00 per eBook 400 units unit Mar. 9 Sales 420 units @ $85.00 per unit Print Mar. 18 Purchase 120 units@ $60.00 per unit Mar. 25 Purchase 200 units@ $62.00 per 200 units unit References Mar. 29 Sales 160 units@ $95.00 per unit 580 units Totals 820 units 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 340 units from the March 5 purchase; the March 29 sale consisted of 40 units from the March 18 purchase and 120 units from the March 25 purchase. Complete this question by entering your answers in the tabs below. Perpetual FIFO Perpetual LIFO Weighted Average Specific Id Compute the cost assigned to ending inventory using FIFO. Perpetual FIFO: Mc Graw Hill < Prev 34 of 5 Next >

Answer 1

Ans1a: Perpetual inventory System: In this system, the cost of sales and inventories are updated on every sales and purchase transactions. First in, first out method (FIFO): In this method it is assumed that inventory which is purchased first will be sold first and the inventory will consist of recent purchases. Goods Purchased Cost of Good Sold Ending inventory Date No of Unit Cost Per Unit Total No of Unit Cost Per Unit Total No of Unit Cost Per Unit Mar' 1 $0.0 100) $50.00 Mar' 5 400 $55.00 $22,000.0 $50.00 400 $55.00 500 100 Total $5,000.00 $5,000.00 $22,000.00 $27,000.00 Mar'9 $0.0 $55.00 $50.00 $55.00 $5,000.00 $17,600.00 $22,600.00 $4,400.00 $0.00 420 Mar 18 120 $60.00 $60.00 $7,200.0 $7,200.0 | $0.00 $55.00 $60.00 120 $4,400.00 $7,200.00 $11,600.00 200 Mar 25 200 $62.00 $12,400.0 80 120 200 400 $55.00 $60.00 $62.00 $4,400.00 $7,200.00 $12,400.00 $24,000.00 Mar' 29 $0.0 40 80 80 160 $55.00 $60.00 $4,400.00 $4,800.00 $9,200.00 $60.00 $62.00 200 $2,400.00 $12,400.00 $14,800.00 240 720 $41,600.0 580 $31,800.00 Total Ending inventory Cost 240 $14,800.00

Ans1b: Last in, first out method (LIFO): In this method it is assumed that inventory which is purchased last will be sold first and the inventory will consist of old purchases. Goods Purchased Cost of Good Sold Ending inventory Date No of Unit Cost Per Unit Total No of Unit Cost Per Unit Total No of Unit Cost Per Unit Mar' 1 $0.00 100 $50.00 Mar' 5 400 $55.00 $22,000.00 100 $50.00 400 $55.00 500 Mar'9 $0.00 400 $55.00 $22,000.00 $50.00 $50.00 $1,000.00 420 $23,000.00 Total $5,000.00 $5,000.00 $22,000.00 $27,000.00 80 $0.00 $ 20 20 $50.00 $4,000.00 $0.00 $3,00 Mar'18 120 $60.00 $7,200.00 80 $50.00 $60.00 $4,000.00 $7,200.00 $11,200.00 Mar'25 200 200 $62.00 $62.00 $12,200.00 $12,400.00 120 200 80 120 200 400 80 $50.00 $60.00 $62.00 $4,000.00 $7,200.00 $12,400.00 $23,600.00 Mar 29 $0.00 $62.00 $9,920.00 120 $50.00 $60.00 $62.00 40 240 $4,000.00 $7,200.00 $2,480.00 $13,680.00 Total $41,600.00 580 $32,920.00 Ending inventory Cost 240 $13,680.00

Ansic: In weighted average cost method per unit is derived by total cost of goods available for sale divided by total units of goods available at each transaction of purchase Goods Purchased Cost of Good Sold Ending inventory Date No of Unit Cost Per Unit Total No of Unit Cost Per Unit Total No of Unit Cost Per Unit Mar' 1 $0.00 100 $50.00 Mar' 5 400 $55.00 $22,000.00 100 $50.00 400 $55.00 Average $54.00 Mar'9 $0.00 420 $54.00 $22,680.00 80 $54.00 Mar'18 120 $60.00 $7,200.00 $0.00 80 $54.00 120 $60.00 Average 200 $57.60 Total $5,000.00 $5,000.00 $22,000.00 $27,000.00 500 $4,320.00 $4,320.00 $7,200.00 $11,520.00 Mar'25 200 $62.00 $12,400.00 200 200 400 $57.60 $62.00 $59.80 $11,520.00 $12,400.00 $23,920.00 Average Mar'29 160 $59.80 $9,568.00 240 $59.80 $14,352.00 $0.00 $41,600.00 720 580 $32,248.00 Total Ending inventory Cost 240 $14,352.00

60 Ans1d: Specific Identification: This method refers the tracking and costing of inventory based on the movement of specific, identifiable inventory items in and out of stock. Goods Purchased Cost of Good Sold Ending inventory Date No of Unit Cost Per Unit Total No of Unit Cost Per Unit Total No of Unit | Cost Per Unit Mar' 1 $0.00 100 $50.00 Mar' 5 400 $55.00 $22,000.00 100 $50.00 400 $55.00 500 Mar'9 $0.00 80 $50.00 $4,000.00 $50.00 340 $55.00 $18,700.00 $55.00 420 $22,700.00 Mar'18 $60.00 $7,200.00 $0.00 $50.00 $55.00 120 $60.00 200 Mar 25 $62.00 $12,400.00 $50.00 $55.00 120 $60.00 200 $62.00 400 Mar'29 $0.00 $60.00 $2,400.00 $50.00 $62.00 $7,440.00 $55.00 $60.00 $62.00 160 $9,840.00 Total $41,600.00 580 $32,540.00 Ending inventory Cost 240 Total $5,000.00 $5,000.00 $22,000.00 $27,000.00 $1,000.00 $3,300.00 $4,300.00 $1,000.00 $3,300.00 $7,200.00 $11,500.00 $1,000.00 $3,300.00 $7,200.00 $12,400.00 $23,900.00 $1,000.00 $3,300.00 $4,800.00 $4,960.00 $14,060.00 60 120 80 240 720 $14,060.00