Greg’s Bicycle Shop has the following transactions related to its top-selling Mo

Question

Greg’s Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March 2015. Greg's Bicycle Shop uses a periodic inventory system. Date Transactions Units Cost per Unit Total Cost March 1 Beginning inventory 20 $250 $ 5,000 March 5 Sale ($400 each) 15 March 9 Purchase 10 270 2,700 March 17 Sale ($450 each) 8 March 22 Purchase 10 280 2,800 March 27 Sale ($475 each) 12 March 30 Purchase 9 300 2,700 $ 13,200

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

If Greg’s Bicycle Shop chooses to report inventory using LIFO instead of FIFO, record the LIFO adjustment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation / Answer

1) Weighted average rate = $13,200/ 49 units = $269

cost of goods sold          = 35 * 269                   = $9415

FIFO

Cost of goods sold = ( $5000 + 2700 + 5 *280) = $9100

LIFO

Cost of good solde = ( 2700 + 2800 + 6* 250 ) = $9,700

Ending invenotry under FIFO = ( 9*300 + 5*280 ) = $4,100

Under LIFO                              = $13,200 - $9700   = $3500

Adjusting entry

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