Question

Salt Co. and Pepper Co. are in the same business and sell the same merchandise but have different inventory systems: Salt's is perpetual and Pepper's is periodic. Both companies sell their products at a price of $10 each, and their inventory activity for March of 2020 is presented below. Salt Date Description Unit Price $1 $2 Total Cost $ 50 $100 02/29/20 Beginning Inventory 03/08/20 Purchase #1 03/15/20 Sale 03/22/20 Purchase #2 03/27/20 Purchase #3 03/31/20 Ending Inventory Number of Units 50 50 90 50 50 110 Pepper Number Unit Date Description of Units Price 02/29/20 Beginning Inventory 50 $1 03/08/20 Purchase #1 50 $2 03/22/20 Purchase #2 50 $3 03/27/20 Purchase #3 50 $4 03/31/20 Ending Inventory* 110* *Determined by end-of-month physical count. Total Cost $ 50 $100 $150 $200 $3 $4 $150 $200 Required—Calculate each of the following under the assumption indicated: 1. Salt's ending inventory at 03/31/20 assuming it uses FIFO 2. Salt's October cost of goods sold assuming it uses FIFO. 3. Salt's October gross profit assuming it uses FIFO. 4. Salt's ending inventory at 03/31/20 assuming it uses LIFO. 5. Salt's October cost of goods sold assuming it uses LIFO. 6. Salt's October gross profit assuming it uses LIFO. 7. Pepper's ending inventory at 03/31/20 assuming it uses FIFO. 8. Pepper's October cost of goods sold assuming it uses FIFO. 9. Pepper's October gross profit assuming it uses FIFO. 10. Pepper's ending inventory at 03/31/20 assuming it uses LIFO. 11. Pepper's October cost of goods sold assuming it uses LIFO. 12. Pepper's October gross profit assuming it uses LIFO.

Answer 1

Working (50 units * 4) + (50 units * 3) + (10units * 2) Solution 370 (50 units * 1) + ( 40units * 2) 130 (90 units * 10) - $ 130 770 (50 units * 1) + ( 40 units * 2) 130 (50 units * 4) + ( 40 units * 3) 320 (90 units * 10) - $ 320 580 (50 units * 4) + (50units * 3) + (10units * 2) 370 (50 units * 1) + ( 40units * 2) 130 (90 units * 10) - $ 130 770 (50 units * 1) + (50 units * 2) + ( 10 units * 3) 180 11) (50 units * 4) + ( 40 units * 3) 320 12) (90 units * 10) - $ 320 580