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 Retail Units Acquired at Cost 100 units @ $50.00 per unit 400 units @ $55.00 per unit Date Activities Mar. 1 Beginning inventory Mar. 5 Purchase Mar. 9 Sales Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales 420 units @ $85.00 per unit 120 units @ $60.00 per unit 200 units @ $62.00 per unit 160 units @ $95.00 per unit 580 units Totals 820 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 80 units from beginning inventory and 340 units from the March 5 purchase; the March 29 sale consisted of 40 units from the March 18 purchase and 120 units from the March 25 purchase. (Round weighted average cost per unit to two decimals.) Gross Margin FIFO LIFO Avg. Cost Spec. ID Sales $ 50,900 $ 50,900 $ 50,900 $ 50,900 5,000 Less: Cost of goods sold 5,000 5,000 5,000 Gross profit

Answer 1

	FIFO	LIFO	Weighted Average	Specific Identification
Sales	$      50,900	$   50,900	$                           50,900	$   50,900
Cost of goods sold	$      31,800	$   32,920	$                           32,248	$   32,540
Gross Profit	$      19,100	$   17,980	$                           18,652	$   18,360

FIFO Cost of goods available for sale Cost of goods sold Mar-01 Mar-05 400 $ 55.00 $ 22,000 Ending Inventory 100 $ 50.00 $ 5,000 1005 50.00 $ 5,000 400 $ 55.00 $ 22,000 80S 55.00 $ 4,400 Mar-09 100 S 320 $ 50.00 $ 5,000 55.00 $ 17,600 Mar-18 120 $ 60.00 $ 7,200 Mar-25 200 $ 62.00$ 12,400 80 $ 120 80$ 120 S 2005 40$ 2005 240 55.00 $ 4,400 60.00 $ 7,200 55.00 $ 4,400 60.00 $ 7,200 62.00 $ 12,400 60.00 $ 2,400 62.00 $ 12,400 $ 14,800 Mar-29 80$ 80$ 580 55.00 $ 4,400 60.00 S 4,800 $ 31,800 Totals 720 S 41,600 LIFO Cost of goods available for sale Cost of goods sold Mar-01 Mar-05 400 $ 55.00 $ 22,000 Ending Inventory 100 $ 50.00 $ 5,000 100 S 50.00 $ 5,000 400S 55.00 $ 22,000 80 $ 50.00 $ 4,000 Mar-09 400 $ 20 S 55.00 $ 22,000 50.00 $ 1,000 Mar-18 120 $ 60.00 $ 7,200 Mar-25 200S 62.00 $ 12,400 80$ 120S 80S 120 S 200 $ 80 $ 120 S 40 $ 240 50.00 $ 4,000 60.00 $ 7,200 50.00 5 4,000 60.00 $ 7,200 62.00 $ 12,400 50.00 $ 4,000 60.00 $ 7,200 62.00 $ 2,480 $ 13,680 Mar-29 160 S 62.00 $ 9,920 Totals 720 $ 41,600 580 $ 32,920

Weighted Average - Cost of goods available for sale Cost of goods sold Mar-01 Mar-05 400 $ 55.00 22,000 420 $ 54.00 $ 22.680 Mar-09) Mar-18 120 $ 60.00 7,200 Ending Inventory 100 $ 50.00 $ 5,000 100 $ 50.00 $ 5,000 400 $ 55.00 $ 22,000 500 $ 54.00 $ 27,000 80 $ 54.00 $ 4,320 80 $ 54.00 $ 4,320 $ 60.00 $ 7,200 200 $ 57.60 $ 11,520 200 $ 57.60 $ 11,520 200 $ 62.00 $ 12,400 400 $ 59.80 23,920 240 $ 59.80 $ 14,352 240 $ 59.80 $ 14,352 120 Mar-25 200 $ 62.00 12,400 Mar-29 160 $ 59.80 $ 9,568 580 $ 32,248 Totals 720 $ 41,600 Specific Identification Cost of goods available for sale Cost of goods sold Ending Inventory Mar-01 100 $ 50.00 $ 5,000 Mar-05 400 $ 55.00 $ 22,000 100 $ 50.00 $ 5,000 400 $ 55.00 $ 22,000 Mar-09 80 $ 50.00 $ 4,000 20 $ 50.00 $ 1,000 340 $ 55.00 $ 18,700 60 $ 55.00 $ 3,300 Mar-18 120 $ 60.00 $ 7,200 20 $ 50.00 $ 1,000 60 $ 55.00 $ 3,300 120 $ 60.00 $ 7,200 Mar-25 200 $ 62.00 $ 12,400 20 $ 50.00 $ 1,000 60 $ 55.00 $ 3,300 120 $ 60.00 $ 7,200 200 $ 62.00 $ 12,400 Mar-29) 40 $ 60.00 $ 2,400 20 $ 50.00 $ 1,000 120 $ 62.00 $ 7,440 60 $ 55.00 $ 3,300 80 $ 60.00 $ 4,800 80 $ 62.00 $ 4,960 Totals 720 41,600 580 $ 32,540 240 $ 14,060