The beginning inventory for Dunne Co. and data on purchases and sales for a thre
ID: 2497654 • Letter: T
Question
The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown below
Date
FIFO
1. Determine the inventory on June 30, 2016, and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
LIFO
2. Determine the inventory on June 30, 2016, and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
Weighted Average Cost Method
3. Determine the inventory on June 30, 2016, and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Round the weighted average unit cost to the dollar.
Final Question
4. Compare the gross profit and June 30, 2016, inventories using the following column headings:
1
FIFO
LIFO
Weighted Average
2
Sales
3
Cost of merchandise sold
4
Gross profit
5
6
Inventory, June 30, 2016
Thank you
Date
Transaction Number of Units Per Unit Total Apr. 3 Inventory 25 $1,200 $30,000 8 Purchase 75 1,240 93,000 11 Sale 40 2,000 80,000 30 Sale 30 2,000 60,000 May 8 Purchase 60 1,260 75,600 10 Sale 50 2,000 100,000 19 Sale 20 2,000 40,000 28 Purchase 80 1,260 100,800 June 5 Sale 40 2,250 90,000 16 Sale 25 2,250 56,250 21 Purchase 35 1,264 44,240 28 Sale 44 2,250 99,000Explanation / Answer
Closing units inventory in April = opening inventory + purchases - sales
= 25 + 75 - (40+30)
= 30
Closing units inventory in May = opening inventory (April closing) + purchases - sales
= 30 + 60 - (50+20) + 80
= 100 units
Closing units inventory in June = opening inventory (May closing) + purchases - sales
= 100 - (40+25) + 35 - 44
= 26 units
Merchandise inventory, June 30, 2016 as per FIFO Method
Inventory on june30,2016 = 26 units @ 1264 = 32864
Cost of goods sold = opening inventory + purchases - closing inventory
Cost of goods sold for the three-month period, using the first-in, first-out method
April = 30000 + 93000 - 37200 = 85800
May = 37200 + 75600+100800 - 126000 = 87600
June = 126000 + 44240 - 32864 = 137376
Merchandise inventory, June 30, 2016 as per LIFO Method
Inventory on june30,2016 = 26 units @ 1244 = 32344
Cost of goods sold for the three-month period, using the last-in, first-out method
April = 30000 + 93000 - (25*1200 + 5*1240) = 86800
May = 36200 +75600 + 100800 - (36200+70*1260) = 88200
June = 124400 + 44240 - 32344 = 136296
Merchandise inventory, June 30, 2016 as per weighted average Method
Inventory on june30,2016 = 26 units @ 1257 = 32682
cost of goods sold for the three-month period, using the weighted average cost method
April = 30000+ 93000 - (30* 1230) = 86100
May = 36900 + 75600 + 100800 - (1254*100) = 87900
June = 125400 + 44240 - (1257* 26) = 136958
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