Question

ning Objective 7 Appendix 6A E 6A-26 Comparing ending merchandise inventory, cost of goods sold, and gross profit using the periodic inventory system FIFO, LIFO, and weighted average methods Assume that Jump Coffee Shop completed the following periodic inventory transactions for a line of merchandise inventory: 2. COGS $513 534 603 Jun. 1 Beginning merchandise inventory 17 units @ $ 15 each 12 Purchase 5 units @ $ 19 each 20 Sale 14 units @ $ 37 each 24 Purchase 11 units @ $ 23 each sr 29 Sale 13 units @ $ 37 each Requirements Guant X 18-90 1. Compute ending merchandise inventory, cost of goods sold, and gross profit using the FIFO inventory costing method. 2. Compute ending merchandise inventory, cost of goods sold, and gross profit using the LIFO inventory costing method. on hudalons 16 3. Compute ending merchandise inventory, cost of goods sold, and gross profit using the weighted average inventory costing method. (Round weighted average cost per unit to the nearest cent and all other amounts to the nearest dollar.

Answer 1

Requirement 1: Compute ending merchandise inventory, cost of goods sold, and gross profit under FIFO as follows

Ending merchandise inventory = $138.00

Cost of goods sold = $465.00

Gross profit under FIFO = $534.00

Particulars	Cost of Goods Available for Sale			Cost of Goods Sold			Ending Inventory
	# of Units	Unit Cost	Amount	# of Units	Unit Cost	Amount	# of Units	Unit Cost	Amount
Beginning inventory	17	$15	$255.00	17	$15	$255.00	0	$15	$0.00
Purchases
June 12	5	$19	$95.00	5	$19	$95.00	0	$19	$0.00
June 24	11	$23	$253.00	5	$23	$115.00	6	$23	$138.00
Total	33		$603.00	27		$465.00	6		$138.00

Requirement 2: Compute ending merchandise inventory, cost of goods sold, and gross profit under LIFO as follows

Ending merchandise inventory = $90.00

Cost of goods sold = $513.00

Gross profit under LIFO = $486.00

Particulars	Cost of Goods Available for Sale			Cost of Goods Sold			Ending Inventory
	# of Units	Unit Cost	Amount	# of Units	Unit Cost	Amount	# of Units	Unit Cost	Amount
Beginning inventory	17	$15	$255.00	11	$15	$165.00	6	$15	$90.00
Purchases
June 12	5	$19	$95.00	5	$19	$95.00	0	$19	$0.00
June 24	11	$23	$253.00	11	$23	$253.00	0	$23	$0.00
Total	33		$603.00	27		$513.00	6		$90.00

Requirement 3: Compute ending merchandise inventory, cost of goods sold, and gross profit under weighted average as follows

Ending merchandise inventory = $109.62

Cost of goods sold = $493.29

Gross profit under weighted average method = $505.71

Particulars	Cost of Goods Available for Sale			Cost of Goods Sold			Ending Inventory
	# of Units	Unit Cost	Amount	# of Units	Unit Cost	Amount	# of Units	Unit Cost	Amount
Beginning inventory	17	$15	$255.00
Purchases
June 12	5	$19	$95.00
June 24	11	$23	$253.00
Total	33	$18.27	$603.00	27	$18.27	$493.29	6	$18.27	$109.62

Notes:

Compute gross profit under FIFO, LIFO and weighted average method as follows

Particulars	FIFO	LIFO	Weighted Average
Sales Revenue (27 × $37)	$999.00	$999.00	$999.00
Deduct: Cost of goods sold	$465.00	$513.00	$493.29
Gross Profit	$534.00	$486.00	$505.71