Question

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March Units Sold at Retail Units Acquired at Cost 100 units @ $50.00 per unit 400 units @ $55.00 per unit 420 units @ $85.00 per unit Date Activities Mar. 1 Beginning inventory Mar. 5 Purchase Mar. 9 Sales Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales Totals 120 units @ $60.00 per unit 200 units @ $62.00 per unit 160 units @ $95.00 per unit 580 units 820 units Problem 5-2AA Part 3 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.

Answer 1

Warnerwoods Company Perpetual Inventory System Inventory sheet - FIFO Goods Purchased Date Quantity Cost per unit Total cost 1-Mar 5-Mar 400 $ 55.00 $ 22,000 Cost of goods sold Cost per unit Total cost Quantity Ending Inventory Quantity Cost per unit Total cost 100 $ 50.00 $ 5,000 100 $ 50.00 $ 5,000 400 $ 55.00 $ 22,000 500 $ 27,000 9-Mar 100 320 $ $ 50.00 $ 55.00 $ 5,000 17,600 18-Mar 25-Mar 120 200 $ $ 60.00 62.00 $ $ 7,200 12,400 $ $ $ $ 80 80 120 200 400 40 200 240 240 55.00 $ 4,400 55.00 $ 4,400 60.00 $ 7,200 62.00 $ 12,400 $ 24,000 60.00 $ 2,400 62.00 $ 12,400 $ 14,800 $ 14,800 29-Mar 80 80 $ $ 55.00 60.00 $ $ 4,400 4,800 $ $ 31-Mar 720 $ 41,600 580 $ 31,800 Inventory sheet - LIFO Goods Purchased Date Quantity Cost per unit Total cost 1-Mar 5-Mar 400 $ 55.00 $ 22,000 Cost of goods sold Cost per unit Total cost Quantity Ending Inventory Quantity Cost per unit Total cost 100 $ 50.00 $ 5,000 100 $ 50.00 $ 5,000 400 $ 55.00 $ 22,000 500 $ 27,000 80 $ 50.00 $ 4,000 9-Mar 400 20 $ $ 55.00 $ 50.00 $ 22,000 1,000 18-Mar 120 $ 60.00 $ 7,200 $ $ 50.00 60.00 25-Mar 200 $ 62.00 $ 12,400 $ $ $ 50.00 60.00 62.00 80 120 200 80 120 200 400 80 120 40 240 240 $ 4,000 $ 7,200 $ 11,200 $ 4,000 $ 7,200 $ 12,400 $ 23,600 $ 4,000 $ 7,200 $ 2,480 $ 13,680 $ 13,680 29-Mar 160 $ 62.00 $ 9,920 $ $ $ 50.00 60.00 62.00 31-Mar 720 $ 41,600 580 $ 32,920

Inventory sheet - Average weighted cost Goods Purchased Date Quantity Cost per unit Total cost 1-Mar 5-Mar 400 $ 55.00 $ 22,000 Quantity Cost of goods sold Cost per unit Total cost Calculation -$27,000/500 units $54 per unit 420 $ 54.00 $ 22,680 9-Mar 18-Mar 120 $ 60.00 $ 7,200 Ending Inventory Quantity Cost per unit Total cost 100 $ 50.00 $ 5,000 100 $ 50.00 $ 5,000 400 $ 55.00 $ 22,000 500 $ 54.00 $ 27,000 80 $ 54.00 $ 4,320 80 $ 54.00 $ 4,320 120 $ 60.00 $ 7,200 200 $ 57.60 $ 11,520 200 $ 57.60 $ 11,520 200 $ 62.00 $ 12,400 400 $ 59.80 $ 23,920 240 $ 59.80 $ 14,352 240 $ 14,352 =$11,520/200 units $57.60 per unit 25-Mar 200 $ 62.00 $ 12,400 -$23,920/400 units $59.80 per unit 59.80 29-Mar 31-Mar 160 $ 580 $ $ 9,568 32,248 720 $ 41,600 Inventory sheet - Specific identification Goods Purchased Date Quantity Cost per unit Total cost 1-Mar 5-Mar 400 $ 55.00 $ 22,000 Cost of goods sold Cost per unit Total cost Quantity 9-Mar 80 340 $ $ 50.00 55.00 $ $ 4,000 18,700 18-Mar 25-Mar 120 200 $ $ 60.00 62.00 $ $ 7,200 12,400 Ending Inventory Quantity Cost per unit Total cost 100 $ 50.00 $ 5,000 100 $ 50.00 $ 5,000 400 $ 55.00 $ 22,000 500 $ 27,000 20 $ 50.00 $ 1,000 60 $ 55.00 $ 3,300 80 $ 4,300 20 $ 50.00 $ 1,000 60 $ 55.00 $ 3,300 120 $ 60.00 $ 7,200 200 $ 62.00 $ 12,400 400 $ 23,900 20 $ 50.00 $ 1,000 60 $ 55.00 $ 3,300 80 $ 60.00 $ 4,800 80 $ 62.00 $ 4,960 240 $ 14,060 240 $ 14,060 29-Mar 40 120 $ $ 60.00 62.00 $ $ 2,400 7,440 31-Mar 720 $ 41,600 580 $ 32,540

FIFO LIFO Warnerwoods Company Income Statement Sales Cost of goods sold Gross Profit Calculation =(420*$85)+(160*$95) 50,900 31,800 19,100 50,900 32,920 17,980 Average cost Specific ID 50,900 50,900 32,248 32,540 18,652 18,360