Question

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. Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Beginning inventory 180 units @ $52.60 per unit Mar. 5 Purchase 265 units @ $57.60 per unit Mar. 9 Sales 340 units @ $87.60 per unit Mar. 18 Purchase 125 units @ $62.60 per unit Mar. 25 Purchase 230 units @ $64.60 per unit Mar. 29 Sales 210 units @ $97.60 per unit Totals 800 units 550 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 105 units from beginning inventory and 235 units from the March 5 purchase; the March 29 sale consisted of 85 units from the March 18 purchase and 125 units from the March 25 purchase.

Answer 1

Correct Answer:

	Specific identification	FIFO	LIFO	Weighted Average
Ending Inventory	$    14,960.00	$            16,110.00	$           13,500.00	$                 15,499.26

Working:

Cost of Goods Available for sale
		Units	Cost per unit	value
Beginning Inventory	01-Mar	180	$                     52.60	$                   9,468.00
Purchases	05-Mar	265	$                     57.60	$                 15,264.00
Purchases	18-Mar	125	$                     62.60	$                   7,825.00
Purchases Return	25-Mar	230	$                     64.60	$                 14,858.00
Total		800		$                 47,415.00

Specific Identification
Date	Goods Available for sale			Cost of Goods Sold			Ending Inventory Balance
	# of Units	Cost Per Unit	Cost of Goods Available for sale	# of Units Sold	Cost per Unit	Cost of Goods Sold	# of Units	Cost per Unit	Inventory Balance
Beginning Inventory	180	$   52.60	$         9,468.00	105	$    52.60	$      5,523.00	75	$   52.60	$       3,945.00
									$                    -
Purchases
05-Mar	265	$   57.60	$       15,264.00	235	$    57.60	$    13,536.00	30	$   57.60	$       1,728.00
18-May	125	$   62.60	$         7,825.00	85	$    62.60	$      5,321.00	40	$   62.60	$       2,504.00
25-Mar	230	$   64.60	$       14,858.00	125	$    64.60	$      8,075.00	105	$   64.60	$       6,783.00
Totals	800		$       47,415.00	550	$ 184.80	$    32,455.00	250		$    14,960.00

	FIFO
A	Total Units Available for sale			800		$    47,415.00
	Units Sold			550
	Ending Inventory Units			250
	Valuation
	Cost of Goods Sold		180		$                         52.60	$      9,468.00
			265		$                         57.60	$    15,264.00
			105		$                         62.60	$      6,573.00
B	Cost of Goods Sold		550	units		$    31,305.00
A-B	Ending Inventory		250	units		$    16,110.00

	LIFO
A	Total Units Available for sale			800		$    47,415.00
	Units Sold			550
	Ending Inventory Units			250
	Valuation
	Cost of Goods Sold		230.00		$                         64.60	14,858.00
			125.00		$                         62.60	7,825.00
			195.00		$                         57.60	11,232.00
B	Cost of Goods Sold		550	units		$    33,915.00
A-B	Ending Inventory		250	units		$    13,500.00

	Weighted Average
A	Total Units Available for sale			800		$    47,415.00
	Units Sold			550
	Ending Inventory Units			250
	Valuation
	Cost of Goods Sold		340		$                         55.58	$    18,896.36
			210		$                         62.00	$    13,019.38
B	Cost of Goods Sold		550	units		$    31,915.74
A-B	Ending Inventory		250	units		$    15,499.26

End of answer.

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