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 Activities Units Sold at Retail Units Acquired at Cost 130 units $51.60 per unit 240 units $56.60 per unit Date Mar. 1 Beginning inventory Mar. 5 Purchase Mar. 9 Sales Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales 290 units $86.60 per unit 100 units $61.60 per unit 180 units $63.60 per unit 160 units a $96.60 per unit 450 units Totals 650 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 210 units from the March 5 purchase; the March 29 sale consisted of 60 units from the March 18 purchase and 100 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.) FIFO Avg. Cost Gross Margin Sales Less: Cost of goods sold Gross profit LIFO Spec. ID 25,220.00 26,340.00 25,679.60 26,070.00

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 210 units from the March 5 purchase; the March 29 sale consisted of 60 units from the March 18 purchase and 100 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

Answer 1

Answer:

Gross Margin	FIFO	LIFO	Avg. Cost	Spec. ID
Sales	40570	40570	40570	40570
Less: Cost of Goods Sold	25,220	26,340	25,679	26,070
Gross Profit	15,350	14,230	14,891	14,500

Working:

FIFO Method
	Purchase			Issued			Closing
Date	Unit	Price	Total	Unit	Price	Total	Unit	Price	Total
Opening Stock	130	51.6	6,708
05-Mar	240	56.6	13,584				130	51.6	6708
							240	56.6	13584
09-Mar				130	51.6	6,708	80	56.6	4528
				160	56.6	9,056
18-Mar	100	61.6	6,160				80	56.6	4528
							100	61.6	6160
25-Mar	180	63.6	11,448				80	56.6	4528
							100	61.6	6160
							180	63.6	11448
29-Mar				80	56.6	4,528	20	61.6	1232
				80	61.6	4,928	180	63.6	11448
	Opening & Purchase		37,900	Cost of Goods Sold		25,220	Closing Inventory		12680
LIFO Method
	Purchase			Issued			Closing
Date	Unit	Price	Total	Unit	Price	Total	Unit	Price	Total
Opening Stock	130	51.6	6,708
05-Mar	240	56.6	13,584				130	51.6	6708
							240	56.6	13584
09-Mar				240	56.6	13,584	80	51.6	4128
				50	51.6	2,580
18-Mar	100	61.6	6,160				80	51.6	4128
							100	61.6	6160
25-Mar	180	63.6	11,448				80	51.6	4128
							100	61.6	6160
							180	63.6	11448
29-Mar				160	63.6	10,176	80	51.6	4128
							100	61.6	6160
							20	63.6	1272
	Opening & Purchase		37,900	Cost of Goods Sold		26,340	Closing Inventory		11560
Weighted Average Cost Method
	Purchase			Issued			Closing
Date	Unit	Price	Total	Unit	Price	Total	Unit	Price	Total
Opening Stock	130	51.6	6,708
05-Mar	240	56.6	13,584				370	54.84	20,292
09-Mar				290	54.84	15,904	80	54.84	4,387
18-Mar	100	61.6	6,160				180	58.59	10,547
25-Mar	180	63.6	11,448				360	61.10	21,995
29-Mar				160	61.10	9,776	200	61.10	12,219
	Opening & Purchase		37,900	Cost of Goods Sold		25,679	Closing Inventory		12,221
Specific Identification cost Method
	Purchase			Issued			Closing
Date	Unit	Price	Total	Unit	Price	Total	Unit	Price	Total
Opening Stock	130	51.6	6,708
05-Mar	240	56.6	13,584				130	51.6	6708
							240	56.6	13584
09-Mar				80	51.6	4,128	50	51.6	2580
				210	56.6	11,886	30	56.6	1698
18-Mar	100	61.6	6,160				50	51.6	2580
							30	56.6	1698
							100	61.6	6,160
25-Mar	180	63.6	11,448				50	51.6	2580
							30	56.6	1698
							100	61.6	6,160
							180	63.6	11,448
29-Mar				60	61.6	3,696	50	51.6	2580
				100	63.6	6,360	30	56.6	1698
							40	61.6	2,464
							80	63.6	5,088
	Opening & Purchase		37,900	Cost of Goods Sold		26,070	Closing Inventory		11830