Question

hapter 6 Homework (Algo) i inventory methods (L06-3, 6-4, 6-5) (The following information applies to the questions displayed below.) art 1 of 7 Pete's Tennis Shop has the following transactions related to its top-selling Wilson tennis racket for the month of August Pete's Tennis Shop uses a periodic inventory system. Date Units Unit Cost Total cost 25 August 1 August 4 August 11 August 13 August 20 August 26 August 29 transactions Beginning inventory Sale (5205 each) Purchase Sale $220 each) Purchase Sale ($230 each) Purchase 02:24:54) eBook For the specific identification method, the August 4 sale consists of rackets from beginning inventory, the August 13 sale! consists of rackets from the August 11 purchase, and the August 26 sale consists of one racket from beginning inventory and 10 rackets from the August 20 purchase. Print References Problem 6-2B Part 1 Required: 1. Calculate ending Inventory and cost of goods sold at August 31, using the specific identification method IT Ending inventory Cost of goods sold

Answer 1

1.

	Specific Identification
Ending Inventory	$ 2,116
Cost of Goods Sold	3,464

Ending inventory = 2 x $ 156 + 2 x $ 146 + 12 x $ 126 = $ 2,116

Cost of Goods Sold = Total Cost - Ending Inventory = $ 5,580 - $ 2,116 = $ 3,464

2.

	FIFO
Ending Inventory	$ 2,056
Cost of Goods Sold	3,524

Ending inventory = 12 x $ 126 + 4 x $ 136 = $ 2,056

Cost of Goods Sold = Total Cost - Ending Inventory = $ 5,580 - $ 2,056 = $ 3,524

3.

	LIFO
Ending Inventory	$ 2,416
Cost of Goods Sold	3,164

Ending inventory = 8 x $ 156 + 8 x $ 146 = $ 2,416

Cost of Goods Sold = Total Cost - Ending Inventory = $ 5,580 - $ 2,416 = $ 3,164

4.

	Weighted Average
Ending Inventory	$ 2,232
Cost of Goods Sold	3,348

Weighted average rate = Total Cost / Units Available for Sale = $ 5,580 / 40 = $ 139.50

Ending inventory = 16 x $ 139.50 = $ 2,232

Cost of Goods Sold = $ 5,580 - $ 2,232 = $ 3,348

5.

	Specific Identiification	FIFO	LIFO	Weighted Average
Sales Revenue	$ 5,315	$ 5,315	$ 5,315	$ 5,315
Gross Profit	1,851	1,791	2,151	1,967

Gross Profit = Sales Revenue - Cost of Goods Sold