Question

VIIVIVUIN 1 2 of 15 (14 complete) Score: 0 of 10 pts E6-20 (similar to) Assume that JL. Tire Store completed the following perpetual Inventory transactions for a line of tires: (Click the icon to view the transactions.) Read the requirements Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO Inventory costing method. Enter the transactions in chronological order Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the Purchases Cost of Goods Sold Inventory on Hand Unit Total Total Unit Total Date Quantity Cost Cost Quantity Quantity Cost Cost Unit Enter any number in the edit fields and then click Check Answer. parts Clear All O remaining

Answer 1

Answer to Requirement 1:

Cost of Goods Sold Purchases Inventory on Hand Date Quantity Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Unit Cost Total Cost Oct. 01 28 70 1960 Oct. 11 7 80 560 28 70 1960 7 80 560 Oct. 23 14 70 980 14 70 980 7 80 560 Oct. 26 21 82 1722 14 70 980 7 80 560 21 82 1722 Oct. 29 14 70 980 17 82 1394 7 80 560 4 82 328 Balances 39 2848 17 1394

Answer to Requirement 2:

Purchases Cost of Goods Sold Inventory on Hand Date Total Cost Quantity Quantity Unit Cost Quantity Unit Cost Total Cost Unit Cost Total Cost Oct. 01 28 70 1960 Oct. 11 7 80 560 28 70 1960 7 80 560 Oct. 23 7 70 490 21 70 1470 7 80 560 Oct. 26 21 82 1722 21 70 1470 21 82 1722 Oct. 29 4 70 280 17 70 1190 21 82 1722 Ba lances 39 3052 17 1190

Answer to Requirement 3:

Purchases Cost of Goods Sold Inventory on Hand Date Quantity Quantity Quantity Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost Oct. 01 28 70.00 1960 Oct. 11 7 80.00 560 35 72.00 2520 Oct. 23 14 72.00 1008 21 72.00 1512 Oct. 26 21 82.00 1722 42 77.00 3234 17 Oct. 29 25 77.00 1925 77.00 1309 Ba lances 39 2933 17 1309

Answer to Requirement 4:

If the company wants to maximise its gross profit, then it should select the method which results in lowest cost of goods sold i.e., FIFO inventory method.