Question

Ontario Skateboard Company has the following Inventory and purchases during the fiscal year ended December 31, 2020. 00.- Beginning Inventory March 10 purchased March 20 sold May 13 purchased August 5 purchased September 10 sold 277 units @ $ 90/unit 227 units e$ 92/unit 349 units @ $166/unit 291 units @ $ 86/unit 270 units @ $ 79/unit 556 units @ $166/unit 20 points Skipped Ontario Skateboard Company employs a perpetual Inventory system. Required: 1. Calculate the dollar value of ending Inventory and cost of goods sold using: (Do not round Intermediate calculations. Round the final answers to 2 decimal places. Round weighted average all unit costs to two decimal places.) eBook Ending Inventory Cost of Goods Sold Print FIFO b. Moving weighted average References 2. Using your calculations from Part 1, complete the following schedule: (Do not round Intermediate calculations. Round the final answers to 2 decimal places. Round welghted average all unit costs to two decimal places.) FIFO Moving Weighted Average Sains Cost of goods sold Gross profit

Answer 1

1a) FIFO Method: FIFO stands for First In First Out which means that cost of goods sold must consider cost of those goods initially. As a result, ending inventory will contain cost of recent purchases. Under perpetual method, inventory records are updated continously. Purchases Cost of Goods Sold Balance Units Rate Amount Units Rate Amount Units Rate Amount Beg. Bal. 277 $90.00 $24,930 Mar. 10 227 $92.00 $20,884 277 227 504 $90.00 $92.00 $24,930 $20,884 $45,814 Mar. 20 277 72 $90.00 $92.00 $24,930.00 $6,624.00 $31,554.00 155 $92.00 $14,260.00 349 May. 13 291 $86.00 $25,026 155 291 $92.00 $86.00 446 Aug. 5 270 $78.00 $21,060 155 291 270 716 $92.00 $86.00 $78.00 $14,260.00 $25,026.00 $39,286.00 $14,260.00 $25,026.00 $21,060.00 $60,346.00

Sep. 10 155 291 110 556 $92.00 $86.00 $78.00 $14,260.00 $25,026.00 $8,580.00 $47,866.00 160 $78.00 $12,480.00 905 160 $79,420.00 (Cost of Goods Sold) $12,480.00 (Ending Inventory) 2) 349 $166 $57,934 [349 x $166] Number of units sold on Mar. 20 Selling price per unit sold Total sale value dated Mar. 20 Number of units sold on Sep. 10 Selling price per unit sold Total sale value dated Sep. 10 Total sale revenue 556 $166 $92,296 [556 x $166] $150,230 Moving FIFO Weighted Average $150,230.00 $150,230.00 [As calculated above] $79,420.00 $78,450.34 (As calculated in Part-1] $70,810.00 $71,779.66 (Sales - Cost of goods sold] Sales Cost of goods sold Gross profit