Bike World recently opened several stores in New South Wales. The owner is considering whether a perpetual or periodic inventory system should be used. The company also has an inventory of a bike model with details below:
Requirements:
Perpectual Inventory System; | ||||
1 | Average cost method | |||
Date | Transactions | Quantity | Unit cost | Amount ($ ) |
1-Jun | Beginning inventory | 35 | 215.00 | 7,525.00 |
5-Jun | Purchase | 20 | 217.00 | 4,340.00 |
7-Jun | Purchase | 35 | 220.00 | 7,700.00 |
8-Jun | Purchase | 25 | 210.00 | 5,250.00 |
10-Jun | Cost of goods sold | -80 | 215.78 | (17,262.61) |
17-Jun | Purchase | 35 | 208.00 | 7,280.00 |
20-Jun | Cost of goods sold | -55 | 211.89 | (11,654.02) |
25-Jun | Purchase | 30 | 222.00 | 6,660.00 |
30-Jun | Ending Inventory | 45 | 9,838.37 | |
Total sales ( 135 units x $ 350 ) | 47,250.00 | |||
Less: Total Cost of goods sold | (28,916.63) | |||
Gross Profit | 18,333.37 | |||
2 | LIFO method | |||
Date | Transactions | Quantity | Unit cost | Amount ($ ) |
1-Jun | Beginning inventory | 35 | 215.00 | 7,525.00 |
5-Jun | Purchase | 20 | 217.00 | 4,340.00 |
7-Jun | Purchase | 35 | 220.00 | 7,700.00 |
8-Jun | Purchase | 25 | 210.00 | 5,250.00 |
10-Jun | Cost of goods sold | -25 | 210.00 | (5,250.00) |
" | -35 | 220.00 | (7,700.00) | |
-20 | 217.00 | (4,340.00) | ||
17-Jun | Purchase | 35 | 208.00 | 7,280.00 |
20-Jun | Cost of goods sold | -35 | 208.00 | (7,280.00) |
" | -20 | 215.00 | (4,300.00) | |
25-Jun | Purchase | 30 | 222.00 | 6,660.00 |
30-Jun | Ending Inventory | 45 | 9,885.00 | |
Total sales ( 135 units x $ 350 ) | 47,250.00 | |||
Less: Total Cost of goods sold | (28,870.00) | |||
Gross Profit | 18,380.00 | |||
3 | FIFO method | |||
Date | Transactions | Quantity | Unit cost | Amount ($ ) |
1-Jun | Beginning inventory | 35 | 215.00 | 7,525.00 |
5-Jun | Purchase | 20 | 217.00 | 4,340.00 |
7-Jun | Purchase | 35 | 220.00 | 7,700.00 |
8-Jun | Purchase | 25 | 210.00 | 5,250.00 |
10-Jun | Cost of goods sold | -35 | 215.00 | (7,525.00) |
" | -20 | 217.00 | (4,340.00) | |
" | -25 | 220.00 | (5,500.00) | |
17-Jun | Purchase | 35 | 208.00 | 7,280.00 |
20-Jun | Cost of goods sold | -10 | 220.00 | (2,200.00) |
" | -25 | 210.00 | (5,250.00) | |
" | -20 | 208.00 | (4,160.00) | |
25-Jun | Purchase | 30 | 222.00 | 6,660.00 |
30-Jun | Ending Inventory | 45 | 9,780.00 | |
Total sales ( 135 units x $ 350 ) | 47,250.00 | |||
Less: Total Cost of goods sold | (28,975.00) | |||
Gross Profit | 18,275.00 | |||
Periodic Inventory System; | ||||
1 | Average cost method | |||
Date | Transactions | Quantity | Unit cost | Amount ($ ) |
1-Jun | Beginning inventory | 35 | 215.00 | 7,525.00 |
5-Jun | Purchase | 20 | 217.00 | 4,340.00 |
7-Jun | Purchase | 35 | 220.00 | 7,700.00 |
8-Jun | Purchase | 25 | 210.00 | 5,250.00 |
17-Jun | Purchase | 35 | 208.00 | 7,280.00 |
25-Jun | Purchase | 30 | 222.00 | 6,660.00 |
TOTAL | 180 | 38,755.00 | ||
Average cost per unit ( $ 38,755 / 180 units) | 215.31 | |||
30-Jun | Ending Inventory ( 45 units x $ 215.31 ) | 9,688.75 | ||
Total sales ( 135 units x $ 350 ) | 47,250.00 | |||
Less: Total Cost of goods sold ( 135 units x $ 215.31 ) | (29,066.25) | |||
Gross Profit | 18,183.75 | |||
2) | LIFO | Units | Rate | Amount $ |
Total sales ( 135 units x $ 350 ) | 135 | 350.00 | 47,250.00 | |
Cost of goods sold; | ||||
30.00 | 222.00 | 6660 | ||
35.00 | 208.00 | 7280 | ||
25 | 210.00 | 5250 | ||
35 | 220.00 | 7700 | ||
10 | 217.00 | 2170 | ||
Total cost of goods sold | 135.00 | 29060 | ||
Gross profit | 18,190.00 | |||
Ending Inventory | 45 | 9,695.00 | ||
3 | FIFO | Units | Rate | Amount $ |
Total sales | 135 | 350.00 | 47,250.00 | |
Cost of goods sold; | ||||
35.00 | 215.00 | 7525 | ||
20.00 | 217.00 | 4340 | ||
35.00 | 220.00 | 7700 | ||
25.00 | 210.00 | 5250 | ||
20.00 | 208.00 | 4160 | ||
Total cost of goods sold | 135.00 | 28975 | ||
Gross profit | 18,275.00 | |||
Ending Inventory | 45 | 9,780.00 |
Average | LIFO | FIFO | |||||||
Perpectual | Periodic | Difference | Perpectual | Periodic | Difference | Perpectual | Periodic | Difference | |
Cost of goods sold | 28,916.63 | 29,066.25 | 149.62 | 28,870.00 | 29060 | 190.00 | 28,975.00 | 28975 | - |
Gross Profit | 18,333.37 | 18,183.75 | (149.62) | 18,380.00 | 18,190.00 | (190.00) | 18,275.00 | 18,275.00 | - |
Ending Inventory | 9,838.37 | 9,688.75 | (149.62) | 9,885.00 | 9,695.00 | (190.00) | 9,780.00 | 9,780.00 | - |
Bike World recently opened several stores in New South Wales. The owner is considering whether a...
Part B-25 marks- Inventory management Bike World recently opened several stores in New South Wales. The owner is considering whether a perpetual or periodic inventory system should be used. The company also has an inventory of a bike model with details below: Date Item Jun Quantity Unit cost 35 20 35 25 80 35 Inventory 215 217 5 Purchase 7 Purchase 8 Purchase 10 Sale 17 Purchase 20 Sale 25 Purchase 210 208 30 Sale price is $350 per unit...
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