Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Beginning inventory 180 units @ $52.60 per unit Mar. 5 Purchase 265 units @ $57.60 per unit Mar. 9 Sales 340 units @ $87.60 per unit Mar. 18 Purchase 125 units @ $62.60 per unit Mar. 25 Purchase 230 units @ $64.60 per unit Mar. 29 Sales 210 units @ $97.60 per unit Totals 800 units 550 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 105 units from beginning inventory and 235 units from the March 5 purchase; the March 29 sale consisted of 85 units from the March 18 purchase and 125 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)
Correct Answer:
Specific identification |
FIFO |
LIFO |
Weighted Average |
|
Ending Inventory |
$ 14,960.00 |
$ 16,110.00 |
$ 13,500.00 |
$ 15,499.26 |
Working:
Cost of Goods Available for sale |
||||
Units |
Cost per unit |
Value |
||
Beginning Inventory |
01-Mar |
180 |
$ 52.60 |
$ 9,468.00 |
Purchases |
05-Mar |
265 |
$ 57.60 |
$ 15,264.00 |
Purchases |
18-Mar |
125 |
$ 62.60 |
$ 7,825.00 |
Purchases Return |
25-Mar |
230 |
$ 64.60 |
$ 14,858.00 |
Total |
800 |
$ 47,415.00 |
||
Specific Identification |
|||||||||
Date |
Goods Available for sale |
Cost of Goods Sold |
Ending Inventory Balance |
||||||
# of Units |
Cost Per Unit |
Cost of Goods Available for sale |
# of Units Sold |
Cost per Unit |
Cost of Goods Sold |
# of Units |
Cost per Unit |
Inventory Balance |
|
Beginning Inventory |
180 |
$ 52.60 |
$ 9,468.00 |
105 |
$ 52.60 |
$ 5,523.00 |
75 |
$ 52.60 |
$ 3,945.00 |
$ - |
|||||||||
Purchases |
|||||||||
05-Mar |
265 |
$ 57.60 |
$ 15,264.00 |
235 |
$ 57.60 |
$ 13,536.00 |
30 |
$ 57.60 |
$ 1,728.00 |
18-May |
125 |
$ 62.60 |
$ 7,825.00 |
85 |
$ 62.60 |
$ 5,321.00 |
40 |
$ 62.60 |
$ 2,504.00 |
25-Mar |
230 |
$ 64.60 |
$ 14,858.00 |
125 |
$ 64.60 |
$ 8,075.00 |
105 |
$ 64.60 |
$ 6,783.00 |
Totals |
800 |
$ 47,415.00 |
550 |
$ 184.80 |
$ 32,455.00 |
250 |
$ 14,960.00 |
FIFO |
||||||
A |
Total Units Available for sale |
800 |
$ 47,415.00 |
|||
Units Sold |
550 |
|||||
Ending Inventory Units |
250 |
|||||
Valuation |
||||||
Cost of Goods Sold |
180 |
$ 52.60 |
$ 9,468.00 |
|||
265 |
$ 57.60 |
$ 15,264.00 |
||||
105 |
$ 62.60 |
$ 6,573.00 |
||||
B |
Cost of Goods Sold |
550 |
units |
$ 31,305.00 |
||
A-B |
Ending Inventory |
250 |
units |
$ 16,110.00 |
LIFO |
||||||
A |
Total Units Available for sale |
800 |
$ 47,415.00 |
|||
Units Sold |
550 |
|||||
Ending Inventory Units |
250 |
|||||
Valuation |
||||||
Cost of Goods Sold |
230.00 |
$ 64.60 |
14,858.00 |
|||
125.00 |
$ 62.60 |
7,825.00 |
||||
195.00 |
$ 57.60 |
11,232.00 |
||||
B |
Cost of Goods Sold |
550 |
units |
$ 33,915.00 |
||
A-B |
Ending Inventory |
250 |
units |
$ 13,500.00 |
Weighted Average |
||||||
A |
Total Units Available for sale |
800 |
$ 47,415.00 |
|||
Units Sold |
550 |
|||||
Ending Inventory Units |
250 |
|||||
Valuation |
||||||
Cost of Goods Sold |
340 |
$ 55.58 |
$ 18,896.36 |
|||
210 |
$ 62.00 |
$ 13,019.38 |
||||
B |
Cost of Goods Sold |
550 |
units |
$ 31,915.74 |
||
A-B |
Ending Inventory |
250 |
units |
$ 15,499.26 |
End of answer.
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Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions fo...
Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Beginning inventory 180 units @ $52.60 per unit Mar. 5 Purchase 265 units @ $57.60 per unit Mar. 9 Sales 340 units @ $87.60 per unit Mar. 18 Purchase 125 units @ $62.60 per unit Mar. 25 Purchase 230 units @ $64.60 per unit Mar. 29 Sales 210 units @...
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. Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Beginning inventory 180 units @ $52.60 per unit Mar. 5 Purchase 265 units @ $57.60 per unit Mar. 9 Sales 340 units @ $87.60 per unit Mar. 18 Purchase 125 units @ $62.60 per unit Mar. 25 Purchase 230 units @...
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. Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Beginning inventory 180 units @ $52.60 per unit Mar. 5 Purchase 265 units @ $57.60 per unit Mar. 9 Sales 340 units @ $87.60 per unit Mar. 18 Purchase 125 units @ $62.60 per unit Mar. 25 Purchase 230...
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