Question

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Greg’s Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. Greg's Bicycle Shop uses a periodic inventory system.

Date	Transactions	Units	Cost per Unit	Total Cost
March 1	Beginning inventory	20	$245	$	4,900
March 5	Sale ($390 each)	15
March 9	Purchase	10	265		2,650
March 17	Sale ($440 each)	8
March 22	Purchase	10	275		2,750
March 27	Sale ($465 each)	12
March 30	Purchase	8	295		2,360
				$	12,660

2. Using FIFO, calculate ending inventory and cost of goods sold at March 31.

3. Using LIFO, calculate ending inventory and cost of goods sold at March 31.

4. Using weighted-average cost, calculate ending inventory and cost of goods sold at March 31. (Round your intermediate and final answers to 2 decimal places.)

5.Calculate sales revenue and gross profit under each of the four methods.(Round weighted-average cost amounts to 2 decimal places.)

Answer 1

Correct Answer:

Periodic	FIFO	LIFO	Weighted Average
Cost of Goods Sold	$                     8,925	$                     9,475	$                         9,231
Ending Inventory	$                     3,735	$                     3,185	$                         3,429

		FIFO	LIFO	Weighted Average
A	Sales Revenue	$                   14,950.00	$            14,950.00	$    14,950.00
B	Cost of goods sold	$                     8,925.00	$              9,475.00	$      9,231.25
	Gross profit	$                     6,025.00	$              5,475.00	$      5,718.75

Working:

Cost of Goods Available for sale
	Units	Cost per unit	value
Beginning Inventory	20	$                     245.0	$                     4,900.0
Purchases	10	$                     265.0	$                     2,650.0
Purchases	10	$                     275.0	$                         2,750
Purchases	8	$                     295.0	$                     2,360.0
Total	48		$                       12,660

Weighted Average Cost Per unit
Units		(A)	48
Total Cost		(B)	$            12,660.00
Average Cost		(C=B/A)	$                  263.75

	FIFO
A	Total Units Available for sale			48		$               12,660
	Units Sold			35
	Ending Inventory Units			13
	Valuation
	Cost of Goods Sold		20		$                       245.00	$            4,900.00
			10		$                       265.00	$                  2,650
			5		$                       275.00	$            1,375.00
B	Cost of Goods Sold		35	units		$                  8,925
A-B	Ending Inventory		13	units		$              3,735.0

	LIFO
A	Total Units Available for sale			48		$               12,660
	Units Sold			35
	Ending Inventory Units			13
	Valuation
	Cost of Goods Sold		8		$                       295.00	2,360.00
			10		$                       275.00	2,750.00
			10		$                       265.00	2,650.00
			7.00		$                       245.00	1,715.00
						-
						-
B	Cost of Goods Sold		35	units		$            9,475.00
A-B	Ending Inventory		13	units		$            3,185.00

	Weighted Average
A	Total Units Available for sale			48		$         12,660.00
	Units Sold			35
	Ending Inventory Units			13
	Valuation
	Cost of Goods Sold		35		$                  263.7500	$            9,231.25
B	Cost of Goods Sold		35	units		$            9,231.25
A-B	Ending Inventory		13	units		$            3,428.75

Units sold	Selling price per unit	total
15	$                        390	$           5,850
8	$                        440	$            3,520
12	$                        465	$            5,580
total Sales Revenue		$          14,950

End of answer.

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