Army-Navy Surplus began March with 70 tents that cost $20each. During the month,

Question

Army-Navy Surplus began March with 70 tents that cost $20each. During the month, Amy-Navy Surplus made the followingpurchases at cost: March4                   100 tents @ $22 = $2,200           19                  160 "      @ 24 = 3,840           25                    40"       @ 25 = 1,000 Army-Navy Surplus sold 320 tents, and at March 31 the endinginventory consists of 50 tents. The sale price of each tent was$45. Ques.: Prepare Army-Navy Surplus's income statement for March. Reportgross profit. Operating expenses totaled, $4,000. Army-Navy usesavg. costing for inventory. The income tax rate is 40%. Additional Info.: the total i got for the avg cost before the Inc. Stmt. was$7,299, FIFO cost was $7,200, and LIFO cost was $7,400. can someone please help me with the ques? i have no idea howto really start it or if im doing it correct. Thanks. Army-Navy Surplus began March with 70 tents that cost $20each. During the month, Amy-Navy Surplus made the followingpurchases at cost: March4                   100 tents @ $22 = $2,200           19                  160 "      @ 24 = 3,840           25                    40"       @ 25 = 1,000 Army-Navy Surplus sold 320 tents, and at March 31 the endinginventory consists of 50 tents. The sale price of each tent was$45. Ques.: Prepare Army-Navy Surplus's income statement for March. Reportgross profit. Operating expenses totaled, $4,000. Army-Navy usesavg. costing for inventory. The income tax rate is 40%. Additional Info.: the total i got for the avg cost before the Inc. Stmt. was$7,299, FIFO cost was $7,200, and LIFO cost was $7,400. can someone please help me with the ques? i have no idea howto really start it or if im doing it correct. Thanks. the total i got for the avg cost before the Inc. Stmt. was$7,299, FIFO cost was $7,200, and LIFO cost was $7,400. can someone please help me with the ques? i have no idea howto really start it or if im doing it correct. Thanks.

Explanation / Answer

March1           70tents x$20            =      $1,400 March4         100 tents x22              =      $2,200 March 19       160 tents x24             =      $3,840 March 25      40   tents x25              =      $1,000 -----------------------------------------------------                       370tents                     =      $8,440         Averageprice pertent      =   $8,440 /370   =   $22.81 ==================================== Cost of goodssold             320 tents x$22.81         =      $7,299 Closinginventory                  50tents x$22.81         =      $1,141                                                                                      Income Statement ============= Sales                                                   $14,400 COGS                                                 $7,299                                                          -----------    Grossprofit                                      $7,101 Operatingexpenses                              $4,000    Income beforetaxes                         $3,101 Income taxes40%                              $1,240 NetIncome                                       $1,861        

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