Question

value: 20.00 points Scoresby Inc. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost 4,000 $18 a. Inventory, Beginning For the vear b. Purchase, March 5 c. Purchase, September 19 d. Sale, April 15 (sold for $63 per unit) e. Sale, October 31 (sold for $66 per unit) f. Operating expenses (excluding income tax expense), $595,000 19 21 10,000 6,000 4,100 9,000 Required: 1. Calculate the number and cost of goods available for sale Number of Goods Available for Sale 20,000 units Cost of Goods Available for Sale $388,000 2. Calculate the number of units in ending inventory Ending Inventory units

Answer 1

Req 1:
Units and cost of Goods available for sale
	RECIEPTS
DATE	UNITS	RATE	AMOUNT $
1-Jan	4000	18	72000
Purchasse
5-Mar	10000	19	190000
19-Sep	6000	21	126000
TOTAL	20000		388000
Req 2:
Ending Inventory units:			6900 Units
Req 3
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC FIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	4000	18	72000	4000	18	72000
Purchasse
5-Mar	10000	19	190000	9100	19	172900	900	19	17100
19-Sep	6000	21	126000				6000	21	126000
TOTAL	20000		388000	13100		244900	6900		143100
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC LIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	4000	18	72000				4000	18	72000
Purchasse
5-Mar	10000	19	190000	7100	19	134900	2900	19	55100
19-Sep	6000	21	126000	6000	21	126000
TOTAL	20000		388000	13100		260900	6900		127100
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC WEIGHTED AVERAGE METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	4000	18	72000
Purchasse
5-Mar	10000	19	190000
19-Sep	6000	21	126000
TOTAL	20000	19.4	388000	13100	19.4	254140	6900	19.4	133860
			Ending Inv.	COGS
FIFO			143100	244900
LIFO			127100	260900
Average			133860	254140
Req 4:
			FIFO	LIFO	Average
Sales revennue			852300	852300	852300
Less: COGS			244900	260900	254140
Gross margin			607400	591400	598160
Less: Operating expense			595000	595000	595000
Net Income			12400	-3600	3160
Req 5:
LIFO minimize incocme tax