value: 15.00 points Mojo Industries tracks the number of units purchased and sol
ID: 2398269 • Letter: V
Question
value: 15.00 points Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system Assume its accounting records provided the following information at the end of the accounting period January 31. The inventory's selling price is $12 per unit. Unit Cost Total Cost Transactions Inventory, January1 Sale, January 10 Purchase, January 12 Sale, January 17 Purchase, January 26 $4.00 4.50 5.50 Units 190 170) 240 (110) 70 $ 760 1,080 385 Assuming that for Specific identification method (item 1d) the January 10 sale was from the beginning inventory and the January 17 sale was from the January 12 purchase Required: 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January 31 under each of the following inventory costing methods: (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.) Amount of Goods Available for Sale Ending Inventory Cost of Goods Sold a. Weighted average cost b. First-in, first-out c. Last-in, first-out d. Specific identification 2-a. Of the four methods, which will result in the highest gross profit? Weighted average cost First-in, first-out Last-in, first-out Specific identificationExplanation / Answer
Solution 1:
Total unit available = 190+240+70 = 500 units
Total Sale units = 170+110 = 280 units
Ending Inventory units = 500- 280 = 220 units
a:
b:
c:
d:
Solution 2-a:
FIFO method will result in Highest Gross profit of $2,195 since it has lowest cost of goods sold.
Weighted Average cost method -Computation of Goods available for sale, COGS and ending inventory Particulars Cost of goods available for sale Cost of goods sold - Average cost Ending Inventory - Average cost Nos of units Unit Cost Cost of goods available for sale Nos of units sold Unit Cost Cost of goods sold Nos of units in ending inventory Unit Cost Ending inventory Beginning inventory 190 $4.00 $760 Purchases: 12-Jan 240 $4.50 $1,080 26-Jan 70 $5.50 $385 Total/Average 500 $4.45 $2,225.00 280 $4.45 $1,246.00 220 $4.45 $979.00Related Questions
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