Question

Required information The following information applies to the questions displayed below Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March Units sold at Retolt Units Acquired at Cost 240 units@ $53.80 per unit 295 unitse $58.80 per unit Date Activities Mar. 1 Beginning inventory Mar. 5 Purchase Mar. 9 Sales Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales Totals 400 units & $88.80 per unit 155 units 290 units $63.50 per unit $65.80 per unit 980 units 270 unitse $98.80 per unit 670 units 4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 135 units from beginning inventory and 265 units from the March 5 purchase the March 29 sale consisted of 115 units from the March 18 purchase and 155 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.) FIFO LIFO Avg. Cost S pec. ID Gross Margin Sales Less: Cost of goods sold Gross profit L

Answer 1

Solution 4:

Computation of ending inventory COGS under FIFO - Warnerwoods Co
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Mar	240	$53.80	$12,912.00	0	$0.00	$0.00	0	$0.00	$0.00	240	$53.80	$12,912.00
5-Mar	240	$53.80	$12,912.00	295	$58.80	$17,346.00	0	$0.00	$0.00	240	$53.80	$12,912.00
										295	$58.80	$17,346.00
9-Mar	240	$53.80	$12,912.00	0	$0.00	$0.00	240	$53.80	$12,912.00	135	$58.80	$7,938.00
	295	$58.80	$17,346.00				160	$58.80	$9,408.00
18-Mar	135	$58.80	$7,938.00	155	$63.80	$9,889.00	0	$0.00	$0.00	135	$58.80	$7,938.00
										155	$63.80	$9,889.00
25-Mar	135	$58.80	$7,938.00	290	$65.80	$19,082.00	0	$0.00	$0.00	135	$58.80	$7,938.00
	155	$63.80	$9,889.00							155	$63.80	$9,889.00
										290	$65.80	$19,082.00
29-Mar	135	$58.80	$7,938.00	0	$0.00	$0.00	135	$58.80	$7,938.00	20	$63.80	$1,276.00
	155	$63.80	$9,889.00				135	$63.80	$8,613.00	290	$65.80	$19,082.00
	290	$65.80	$19,082.00
Total							670		$38,871.00	310		$20,358.00

Computation of ending inventory COGS under LIFO - Warnerwoods Co
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Mar	240	$53.80	$12,912.00	0	$0.00	$0.00	0	$0.00	$0.00	240	$53.80	$12,912.00
5-Mar	240	$53.80	$12,912.00	295	$58.80	$17,346.00	0	$0.00	$0.00	240	$53.80	$12,912.00
										295	$58.80	$17,346.00
9-Mar	240	$53.80	$12,912.00	0	$0.00	$0.00	295	$58.80	$17,346.00	135	$53.80	$7,263.00
	295	$58.80	$17,346.00				105	$53.80	$5,649.00
18-Mar	135	$53.80	$7,263.00	155	$63.80	$9,889.00	0	$0.00	$0.00	135	$53.80	$7,263.00
										155	$63.80	$9,889.00
25-Mar	135	$53.80	$7,263.00	290	$65.80	$19,082.00	0	$0.00	$0.00	135	$53.80	$7,263.00
	155	$63.80	$9,889.00							155	$63.80	$9,889.00
										290	$65.80	$19,082.00
29-Mar	135	$53.80	$7,263.00	0	$0.00	$0.00	270	$65.80	$17,766.00	135	$53.80	$7,263.00
	155	$63.80	$9,889.00							155	$63.80	$9,889.00
	290	$65.80	$19,082.00							20	$65.80	$1,316.00
Total							670		$40,761.00	310		$18,468.00

Computation of ending inventory COGS under Weighted Average Cost - Warnerwoods Company
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Mar	240	$53.80	$12,912	0	$0.00	$0	0	$0.00	$0	240	$53.80	$12,912
5-Mar	240	$53.80	$12,912	295	$58.80	$17,346	0	$0.00	$0	535	$56.56	$30,258
9-Mar	535	$56.56	$30,258	0	$0.00	$0	400	$56.56	$22,623	135	$56.56	$7,635
18-Mar	135	$56.56	$7,635	155	$63.80	$9,889	0	$0.00	$0	290	$60.43	$17,524
25-Mar	290	$60.43	$17,524	290	$65.80	$19,082	0	$0.00	$0	580	$63.11	$36,606
29-Mar	580	$63.11	$36,606	0	$0.00	$0	270	$63.11	$17,041	310	$63.11	$19,565
Total							670		$39,664	310		$19,565

Computation of COGS and ending inventory - Specific identification
Particulars	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	240	$53.80	$12,912	135	$53.80	$7,263.00	105	$53.80	$5,649.00
Purchases:
5-Mar	295	$58.80	$17,346	265	$58.80	$15,582.00	30	$58.80	$1,764.00
18-Mar	155	$63.80	$9,889	115	$63.80	$7,337.00	40	$63.80	$2,552.00
25-Mar	290	$65.80	$19,082	155	$65.80	$10,199.00	135	$65.80	$8,883.00
Total	980		$59,229	670		$40,381.00	310		$18,848.00

Computation of Gross Profit
Particulars	FIFO	LIFO	Weighted Average	Specific Identification
Sales	$62,196	$62,196	$62,196	$62,196
Cost of goods sold	$38,871	$40,761	$39,664	$40,381
Gross Profit (Sales - COGS)	$23,325	$21,435	$22,532	$21,815