Question

wheck my wor 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 Date Activities Units Acquired at Cost Units sold at Retail Mar. 1 Beginning inventory 210 unitse $53.20 per unit Mar. 5 Purchase 280 units + $58.20 per unit Mar. 9 Sales 370 units + $88.20 per unit Mar. 18 Purchase 140 units @ $63.20 per unit Mar. 25 Purchase 260 units @ $65.20 per unit Mar. 29 Sales 240 units & $98.20 per unit Totals 890 units 610 units ES 4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 120 units from beginning inventory and 250 units from the March 5 purchase; the March 29 sale consisted of 100 units from the March 18 purchase and 140 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.) Gross Margin FIFO LIFO Avg. Cost Sp+.ID Sales Less: Cost of goods sold Gross profit

Answer 1

Gross Margin	FIFO	LIFO	Avg.Cost	Spe. ID
Sales	$ 56,202	$ 56,202	$ 56,202	$ 56,202
Less: Cost of goods sold	$ 35,052	$ 50,844	$ 35,754	$ 36,382
Gross Profit	$ 21,150	$    5,358	$ 20,448	$ 19,820

Working note:

Sales = ( 370 * $ 88.20 ) + ( 240 * $ 98.20 )

= $ 32,634 + $ 23,568

= $ 56,202

Perpetual Method: Computation of cost of goods sold using FIFO method is as follows: Number of Number Cost per Purchase Cost per Cost of Date Units of Units Unit Cost Unit Goods Sold Purchased Sold Mar. 1 Number Cost Inventory per of Units Unit Balance Balance 210 $ 53.20 $ 11,172 Mar. 5 280 $ 58.20 $ 16,296 210 $ 53.20 $ 280 $ 58.20 $ 11,172 16,296 Mar. 9 210 $ 53.20 $ 160 $ 58.20 $ 11,172 9,312 120 $ 58.20 $ 6,984 Mar. 18 140 $ 63.20 $ 8,848 120 $ 58.20 $ 140 $ 63.20 $ 6,984 8,848 Mar. 25 260 $ 65.20 $ 16,952 120 $ 58.20 $ 140 $ 63.20 $ 260 $ 65.20 $ 6,984 8,848 16,952 Mar. 29 120 $ 58.20 $ 120 $ 63.20 $ 6,984 7,584 20 $ 63.20 $ 260 $ 65.20 $ 1,264 16,952 42,096 610 $ $ 35,052 280 $ 18,216 Total 680 $ Thus, Cost of goods sold is $ 35,052

Computation of cost of goods sold using LIFO method is as follows: Number of Number Cost per Purchase Cost per Cost of Date Units of Units Unit Cost Unit Goods Sold Purchased Sold Mar. 1 Number Cost per Inventory of Units Unit Balance Balance 210 $ 53.20 $ 11,172 Mar. 5 280 $ 58.20 $ 16,296 210 $ 53.20 $ 280 $ 58.20 $ 11,172 16,296 Mar. 9 280 $ 58.20 $ 90 $ 210.00 $ 16,296 18,900 120 $ 53.20 $ 6,384 Mar. 18 140 $ 63.20 $ 8,848 120 $ 53.20 $ 140 $ 63.20 $ 6,384 8,848 Mar. 25 260 $ 65.20 $ 16,952 120 $ 53.20 $ 140 $ 63.20 $ 260 $ 65.20 $ 6,384 8,848 16,952 Mar. 29 240 $ 65.20 $ 15,648 120 $ 53.20 $ 140 $ 63.20 $ 20 $ 65.20 $ 6,384 8,848 1,304 42,096 610 $ 50,844 280 $ 16,536 Total 680 $ Thus, Cost of goods sold is $ 50,844

Computation of cost of goods sold using Weighted average method is as follows: Number of Number Number Cost per Purchase Cost per Cost of Cost per Inventory Date Units Unit of Units of Units Cost Unit Goods Sold Unit Balance Purchased Sold Balance Mar. 1 210 $ 53.20 $ 11,172 Mar. 5 280 $ 58.20 $ 16,296 210 $ 53.20 $ 280 $ 58.20 $ 490 $ 56.06 $ 11,172 16,296 27,468 Mar. 9 370 $ 56.06 $ 20,742 120 $ 56.06 $ 6,727 Mar. 18 140 $ 63.20 $ 8,848 120 $ 56.06 $ 140 $ 63.20 $ 6,727 8,848 Mar. 25 260 $ 65.20 $ 16,952 120 $ 56.06 $ 140 $ 63.20 $ 260 $ 65.20 $ 520 $ 62.55 $ 6,727 8,848 16,952 32,527 Mar. 29 240 $ 62.55$ 15,012 280 $ 62.55$ 17,514 42,096 610 $ 35,754 280 $ 17,514 Total 680 $ Thus, Cost of goods sold is $ 35,754

Computation of cost of goods sold using specific identification method is as follows:
Date	Number of Units Purchased	Cost per Unit	Purchase Cost	Number of Units Sold	Cost per Unit	Cost of Goods Sold	Number of Units Balance	Cost per Unit	Inventory Balance
Mar. 1							210	$   53.20	$         11,172
Mar. 5	280	$   58.20	$         16,296				210	$   53.20	$         11,172
							280	$   58.20	$         16,296
Mar. 9				120	$    53.20	$           6,384
				250	$    58.20	$         14,550	90	$   53.20	$           4,788
							30	$   58.20	$           1,746
Mar. 18	140	$   63.20	$           8,848				90	$   53.20	$           4,788
							30	$   58.20	$           1,746
							140	$   63.20	$           8,848
Mar. 25	260	$   65.20	$         16,952				90	$   53.20	$           4,788
							30	$   58.20	$           1,746
							140	$   63.20	$           8,848
							260	$   65.20	$         16,952
Mar. 29				100	$    63.20	$           6,320
				140	$    65.20	$           9,128	90	$   53.20	$           4,788
							30	$   58.20	$           1,746
							40	$   63.20	$           2,528
							120	$   65.20	$           7,824
Total	680		$         42,096	610		$         36,382	280		$         16,886
Thus, Cost of goods sold is $ 36,382