Question

Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Units Unit Cost 1,800 $ 50 Transactions Beginning inventory, January 1 Transactions during the year: a. Purchase, January 30 6. Sale, March 14 ($100 each) c. Purchase, May 1 d Sale, August 31 ($100 each) 62 2,500 (1, 450) 1, 200 (1,900) 80 Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1. Required: 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: Amount of Goods Ending Inventory Available for Sale cost of Goods Sold a. Last-in, first-out b. Weighted average cost C. First-in, first-out d. Specific identification

Can you also explian how did you get the answer and why is that? Thank you

Answer 1

To
Method. Closing stock Brits (nos) 1450 $ 72500 2150 $ 1,35450 1.a) LIFO 1.6) Weighted Average 1. C) FIFO 1.d) Specific Identification Method 2150 $ 251000 $ 142,660 Biso LIFO Method will results in highest gross profit. Income taxes. 2.b. FIFO Method will results in lowest

to statment of Receľp3 and Issues by adopting Forum in Frost Oat Melled (FIFO Date Pondicular Recalls Issues Balance Chils Rate Value Units Pate blue units Rate Value nu ) 100 ) (9) Jant Opening balan 1800 $50 $90,000 1800 $50 $90,000 $50 190,000 62 $ 15500D Jan 3D Panchose 2500 $6) $ 155000 1800 2500 mar 14 sale 1450 $50 2500 350 2500 $50 $62 $13,500 SCOOD may & Purchase 1200 $80 & 96000 350 2500 12.00 $50 $62 $80 $19,500 $1$5000 $96000 Aug 31 sale $50 450 1550 $62 $14500 96100 950 12.00 $62 $80 16500D 96000 statement of Receipts and Issues by adopling Speciffc Identicalon Method. Date Posticuland Units Recepto Rate Vale ICS Rati $ Woits ho Valee Balante chits Rate hot value (3) ho Jan I Opening Balance 1900 $50 $90,000 $ 155000 1800 $50 $90.000 1800 $50 90.000 2500 $62 $ 155000 $62 Jan 30 Purchase 580 beginilag 1450K sto purchase mar 14 sale 580 1870 $50 62 29000 $53940 $80 $96000 may, Porchall 1200 1220 $50 $61000 1630 $ 62. $ 101,060 1020 50 100 1630 $62 & 101,060 1200 80 $96000 636 96 101,066 50 $80 41600 Aug 31 sale 1920 $50 680 480 61000 54,

Laskin Figuet Out LIF E @ Recet& g 1.3LX by adopting Receipts. Rate Vatae Units Rate € ho Statement of paticular Unit 00 Issued Balance Rake Value Value Units no. $2 $50 $90,000 1800 $50 $90,000 Jan Jan 30 Opening balan 1800 Purchase 2500 fs0 490,000 $62 ICEDOO $62 1800 2500 $155000 1450 $62 89700 $0 $62 1800 950 $90,000 $21900 mar 14 sale Rorchase /1200 $80 $96000 $50 $90,000 $62 $ 2100 $ 80 596000 Aug 31 1800 350 96000 1200 21700 19500 1450 goo 850 350 Sale 90 $62 $50 450 $92500 16) statment of Receipts and Issues by adopting Weighted Average method. Date Posticulan Receipts. chits . Rate Value Issue Rate | Chits Balance Chits Rate Valeee Valu Jan 1. Opening baland. 1800 $50 $90,000 1800 $50 $90,000 2500 $62 $ 155000 Purchase 4300 $ 56 56 249000 Jan 30. mooi sale - - - 1450 $56 $81200 2850 $51 $113000 mag Purchase 1200 $80 $ 96000 4050 $63 $259000 Aug. 31. sale 1900 $63 $119400 2150 $63 $1354501 Note : les are sounded to nearest doller value.