Question

The numbers I have put down are all correct, I dont understand how to fill in the rest of the blanks. Can you also write down how do your get the right answer in details and explain why it is like that ? Thank you very much

Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, 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. Units 140 Unit Cost $26 Transactions Beginning inventory, January 1 Transactions during the year: a. Purchase on account, March 2 b. Cash sale, April 1 ($42 each) c. Purchase on account, June 30 d. Cash sale, August 1 ($42 each) 270 (290) 190 (65) TIP: Although the purchases and sales are listed in chronological order, Scrappers determines the cost of goods sold after all of the purchases have occurred. Required: 1. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round "Cost per Unit" to 2 decimal places.) a. Last-in, first-out. b. Weighted average cost. c. First-in, first-out. d. Specific identification, assuming that the April 1 sale was selected one-fifth from the beginning inventory and four-fifths from the purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30. 2. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes?

Answer 1

3640 LIFO ( Periodic) Cost Per # of Units Unit Total Beginning Inventory 140 Purchases Mar-02 270 28 Jun-30 190 32 Total Purchases 460 Goods Available for Sales 600 cost of Goods Sold Units from Beginning inventory 0 26 Units From March 2 Purchase 165 Units From June 30 Purchases 190 32 Total Cost of Goods sold 355 Ending invntory 245 7560 6 080 13640 17280 4620 6080 10700 6580

140 Weighted Average Periodic Cost Per # of Units Unit Total Beginning Inventory 26 36401 Purchases Mar-02 270 7560 Jun-30 190 32 6080 Total Purchases 460 13640 Goods Available for Sales 600 17280 cost of Goods Sold 355 28.80 10224 Ending invntory 245 7056 28/

Total 26 3640 28 32 FIFO (Periodic) Cost Per # of Units Unit Beginning Inventory 140 Purchases Mar-02 270 Jun-30 1901 Total Purchases 460 Goods Available for Sales 600 cost of Goods Sold Units from Beginning inventory 1401 Units From March 2 Purchase 215 Units From June 30 Purchases ol Total Cost of Goods sold 355 Ending invntory 245) 7560 6080 13640 17280 26 28 327 3640 6020 0 9660 7620

26 270 28 Specific Identificatio (Periodic Cost Per # of Units Unit Total Beginning Inventory 140 3640 Purchases Mar-02 7560 Jun-30 190 326080 Total Purchases 460 13640 Goods Available for Sales 600 17280 cost of Goods Sold Units from Beginning inventory 58 1508 Units From March 2 Purchase 232 28 6496 Units From June 30 Purchases 65 32 2080 Total Cost of Goods sold 355 10084 Ending invntory 245 7196 26 Highest Gross Profit Lowest Income Tax FIFO LIFO