Question

ACCT 101 902 Archie Summer 2019 Homework: Chapter 6 Homework Assignment Score: 0 of 1 pt 1 of 1 (0 complete) HW Score: 06, 0 of 1 P6-28A (similar to) Question Help Fit Gym began October with merchandise inventory of 80 crates of vitamins that cost a total of $3,600 During the mon Fit Gym purchased and sold merchandise on account as follows (Click the icon to view the transactions.) Read the requirements Requirement 1. Prepare a perpetual inventory record, using the FIFO inventory costing method, and determine the company's cost of goods sold, ending merchandise inventory, and gross profit Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction Once all of the transactions have been entered into the perpetual record. calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Purchases Cost of Goods Sold Inventory on Hand Unit Total Unit Total Unit Total Date Quantity Cost Cost Quantity Cost Cost Quantity Cost Cost Oct. 1 600 - X Requirements 5 120 13 1. Prepare a perpetual inventory record, using the FIFO inventory costing method, and determine the company's cost of goods sold, ending merchandise inventory, and gross profit. 130 18 Prepare a perpetual inventory record, using the LIFO inventory costing method, and determine the company's cost of goods sold, ending merchandise inventory, and gross profit. 2. 26 Prepare a perpetual inventory record, using the weighted-average inventory costing method, and determine the company's cost of goods sold, ending merchandise inventory, and gross profit. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.) If the business wanted to pay the least amount of income taxes possible, which method would it choose? 3 B00 250 Totals 4. Done - X Data Table 1 58 each 120 crates @ Oct. 5 Purchase 100 each 130 crates @ 13 Sale 72 each 130 crates@ 18 Purchase 102 each 140 crates @ 26 Sale Done Print Check Answer Clear All parts remaining 6 2:53 n

Answer 1

Sales Revenue = 130 * $100.00 + 140 * $102.00
Sales Revenue = $27,280

Answer 1.

First-in First-out Method Inventory on Hand Cost per Purchases Cost of Goods Sold Cost per Date Cost per Units Total Units Total Units Total unit unit unit Oct. 01 80 45 3600 6960 80 Oct. 05 120 58 45 3600 120 58 6960 Oct. 13 80 45 3600 0 45 0 50 58 2900 70 58 4060 4060 Oct. 18 130 72 9360 70 58 9360 130 72 Oct. 26 70 58 4060 0 58 0 72 43 20 70 5040 60 72 Totals 250 16320 270 15600 60 4320

Cost of Goods Sold = $15,600
Ending Inventory = $4,320

Gross Profit = Sales Revenue - Cost of Goods Sold
Gross Profit = $27,280 - $15,600
Gross Profit = $11,680

Answer 2.

Last-in First-out Method Purchases Cost of Goods Sold Inventory on Hand Cost per Date Cost per Cost per Units Total Units Total Units Total unit unit unit Oct. 01 80 45 3600 3600 Oct. 05 120 58 6960 80 45 120 58 6960 Oct. 13 10 45 450 70 45 3150 120 58 6960 0 58 72 70 Oct. 18 130 9360 45 3150 9360 130 72 Oct. 26 10 45 450 60 45 2700 72 130 9360 0 72 0 Totals 17220 250 16320 270 60 2700

Cost of Goods Sold = $17,220
Ending Inventory = $2,700

Gross Profit = Sales Revenue - Cost of Goods Sold
Gross Profit = $27,280 - $17,220
Gross Profit = $10,060

Answer 3.

Weighted Average Method Purchases Cost of Goods Sold Inventory on Hand Date Cost per unit Cost per Cost per Units Total Units Total Units Total unit unit Oct. 01 80 45.00 3600 45.00 Oct. 05 120 58.00 6960 80 3600 120 58.00 6960 Average Oct. 13 200 52.80 10560 52.80 130 52,80 6864 70 3696 3696 Oct. 18 130 72.00 9360 70 52.80 72.00 130 9360 Average 200 65.28 13056 65.28 Oct. 26 140 65.28 9139 60 3917 Totals 16320 250 270 16003 60 3917

Cost of Goods Sold = $16,003
Ending Inventory = $3,917

Gross Profit = Sales Revenue - Cost of Goods Sold
Gross Profit = $27,280 - $16,003
Gross Profit = $11,277

Answer 4.

If the company wants to minimize its income taxes, then it should select LIFO method of inventory as its gross profit is lowest.