HOMEWORK PROBLEM 2: Stocks, Inc., sells weight-lifting equipment. The sales and
ID: 2393403 • Letter: H
Question
HOMEWORK PROBLEM 2:
Stocks, Inc., sells weight-lifting equipment. The sales and inventory records of the company for January through March 2017 were as follows:
Weight Sets
Unit Cost
Total Cost
Beginning inventory, January 1
460
$30
$13,800
Purchase, January 16
110
32
3,520
Sale, January 25 ($45 per set)
216
45
9,720
Purchase, February 16
105
36
3,780
Sale, February 27 ($40 per set)
307
40
12,280
Purchase, March 10
150
28
4,200
Sale, March 30 ($50 per set)
190
50
9,500
Determine the amounts for ending inventory, cost of goods sold, and gross profit under the FIFO, LIFO and Average Cost costing alternatives. Use the periodic inventory method, which means that all sales are assumed to happen at the end of the period no matter when they actually occurred. Round amounts to the nearest dollar.
Calculate Cost of Goods Available for Sale:
Date
Units
Price
Total
Beginning inventory
460
$30
Beginning Inventory
13,800
January 16
110
$32
+ purchases
3,520
February 16
105
$36
+ purchases
3,780
March 10
150
$28
+ purchases
4,200
TOTAL
825
126
= Goods available for sale
25,300
FIFO:
Calculate FIFO Ending Inventory:
How many sets were sold?
Ending inventory would be the newest 112 sets:
Date
Price
Total
ENDING INVENTORY:
Calculate FIFO Cost of Goods Sold:
This would be the oldest sets from inventory:
Date
Price
Total
$30
$32
$36
$28
FIFO COGS:
Calculate FIFO Gross Profit:
Calculate total sales:
Sales:
TOTAL SALES
Gross Profit:
Sales:
-COGS
Gross Profit
Weight Sets
Unit Cost
Total Cost
Beginning inventory, January 1
460
$30
$13,800
Purchase, January 16
110
32
3,520
Sale, January 25 ($45 per set)
216
45
9,720
Purchase, February 16
105
36
3,780
Sale, February 27 ($40 per set)
307
40
12,280
Purchase, March 10
150
28
4,200
Sale, March 30 ($50 per set)
190
50
9,500
Explanation / Answer
Ans. Total sets was sold are 713 (i.e. 216+307+190). Ans. Ending inventory cost for the newest 112 sets: Date Weight Sets Price Total Purchase, March 10 112 28 3,136 Ending Inventory 3136 Ans. Calculation Cost of goods sold (FIFO): Date Weight Sets Price Total January, 1 460 30 13,800 January, 16 110 32 3,520 February, 16 105 36 3,780 March, 10 38 28 1,064 FIFO COGS 713 22,164 Ans. Calculation of total sales: Date Weight Sets Price Total January, 25 216 45 9,720 February, 27 316 40 12,640 March, 30 190 50 9,500 Total sales 722 31,860 Ans. Calculation of Gross Profit: Sales 31,860 Less: COGS 22,164 Gross Profit 9,696
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.