The following table uses the four inventory costing method and displays the cost
ID: 2344336 • Letter: T
Question
The following table uses the four inventory costing method and displays the cost of ending inventory for Click Cameras.Specific Identification FIFO LIFO Weighted Average Cost
$21,476.00 $21,581.40 $21,410.93 $21,447.36
Click Cameras also reported the following amounts:
Net sales $53,874.92
Purchases available for sale $57,621.31
Instruction:
Use the information given above and determine the cost of merchandise sold and the gross profit on sales for each of the inventory costing methods.
Part 2 (15 points):
Two Wheels operates on a fiscal year beginning January 1. At the beginning of the year, the shop had 6 bicycles @$394 each (opening inventory). During the year the business made the following purchases:
Date Bicycle Cost
Jan.20 4 $399
Mar. 5 5 $415
Apr. 23 7 $419
Aug. 14 4 $423
Oct. 3 6 $430
Nov. 17 3 $435
There were seven bicycles in inventory at the end of the period. During the year, the bicycles were sold for $675 each.
Instructions:
Calculate the cost of the ending inventory using the FIFO, LIFO, and weighted average cost methods.
Prepare a partial income statement for each inventory costing method showing the sales and the calculation of gross profit on sales.
Assume that the sales and purchases are net amounts.
Explanation / Answer
Use the information given above and determine the cost of merchandise sold and the gross profit on sales for each of the inventory costing methods.
Specific ID
FIFO
LIFO
Weighted Avg.
Purchases
57621.31
57621.31
57621.31
57621.31
less ending inv
21476.00
21581.40
21410.93
21447.36
cost of merch sold
36145.31
36039.91
36210.38
36173.95
net sales
53874.92
53874.92
53874.92
53874.92
cost of merch sold
36145.31
36039.91
36210.38
36173.95
gross profit
17729.61
17835.01
17664.54
17700.97
Part 2 (15 points):
Instructions:
Calculate the cost of the ending inventory using the FIFO, LIFO, and weighted average cost methods.
FIFO
3
435.00
1305.00
4
430.00
1720.00
Ending inv for FIFO:
3025.00
LIFO
6
394.00
2364.00
1
399.00
399.00
Ending inv for LIFO
2763.00
Weighted average
7
415.5714
2909
Ending inv for weighted avg
2909
calculation for weighted avg:
beg.
6
394
2364
20-Jan
4
399
1596
5-Mar
5
415
2075
23-Apr
7
419
2933
14-Aug
4
423
1692
3-Oct
6
430
2580
17-Nov
3
435
1305
total
35
14545
(14545 is amount available for sale)
14545/35 = 415.5714 415.5714 is the cost per unit
Prepare a partial income statement for each inventory costing method showing the sales and the calculation of gross profit on sales.
Assume that the sales and purchases are net amounts.
FIFO
LIFO
weighted avg
sales
18900.00
18900.00
18900.00
this is 675*(35-7)
cost of merch sold
11520.00
11782.00
11636.00
this is avalable for sale (14545) less ending inv
gross profit
7380.00
7118.00
7264.00
Specific ID
FIFO
LIFO
Weighted Avg.
Purchases
57621.31
57621.31
57621.31
57621.31
less ending inv
21476.00
21581.40
21410.93
21447.36
cost of merch sold
36145.31
36039.91
36210.38
36173.95
net sales
53874.92
53874.92
53874.92
53874.92
cost of merch sold
36145.31
36039.91
36210.38
36173.95
gross profit
17729.61
17835.01
17664.54
17700.97
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