The beginning inventory for Midnight Supplies and data on purchases and sales fo
ID: 2516859 • Letter: T
Question
The beginning inventory for Midnight Supplies and data on purchases and sales for a three month period are as follows:
Date
Transaction
Number of Units
Per Unit
Total
Jan.
1
Inventory
7,500
$ 75.00
$ 562,500
10
Purchase
22,500
85.00
1,912,500
28
Sale
11,250
150.00
1,687,500
30
Sale
3,750
150.00
562,500
Feb.
5
Sale
1,500
150.00
225,000
10
Purchase
54,000
87.50
4,725,000
16
Sale
27,000
160.00
4,320,000
28
Sale
25,500
160.00
4,080,000
Mar.
5
Purchase
45,000
89.50
4,027,500
14
Sale
30,000
160.00
4,800,000
25
Purchase
7,500
90.00
675,000
30
Sale
26,250
160.00
4,200,000
Instructions
1.
Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
2.
Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
3.
Determine the inventory on March 31 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 nearest cent and use that amount in subsequent computations.
4.
Compare the gross profit and the March 31 inventories.
1. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
Inventory, March 31
Cost of goods sold
2. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
Inventory, March 31
Cost of goods sold
3. Determine the inventory on March 31 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 nearest cent and use that amount in subsequent computations.
Inventory, March 31
Cost of goods sold
4. Compare the gross profit and the March 31 inventories, using the following column headings.
1
FIFO
LIFO
Weighted Average
2
Sales
3
Cost of goods sold
4
Gross profit
5
6
Inventory, March 31
Date
Transaction
Number of Units
Per Unit
Total
Jan.
1
Inventory
7,500
$ 75.00
$ 562,500
10
Purchase
22,500
85.00
1,912,500
28
Sale
11,250
150.00
1,687,500
30
Sale
3,750
150.00
562,500
Feb.
5
Sale
1,500
150.00
225,000
10
Purchase
54,000
87.50
4,725,000
16
Sale
27,000
160.00
4,320,000
28
Sale
25,500
160.00
4,080,000
Mar.
5
Purchase
45,000
89.50
4,027,500
14
Sale
30,000
160.00
4,800,000
25
Purchase
7,500
90.00
675,000
30
Sale
26,250
160.00
4,200,000
Instructions
1.
Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
2.
Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
3.
Determine the inventory on March 31 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 nearest cent and use that amount in subsequent computations.
4.
Compare the gross profit and the March 31 inventories.
1. Determine the inventory on March 31 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
Inventory, March 31
Cost of goods sold
Explanation / Answer
ANSWER 1 FIFO METHOD Date Transaction Number of Units Per Unit units rate stock total stock Jan. 1 Inventory 7,500 $ 75.00 7500 75 562500 562500 10 Purchase 22,500 85 7500 75 562500 2475000 22500 85 1912500 28 Sale 11,250 150 18750 85 1593750 1593750 30 Sale 3,750 150 15000 85 1275000 1275000 Feb. 5 Sale 1,500 150 13500 85 1147500 1147500 10 Purchase 54,000 87.5 13500 85 1147500 5872500 54000 87.5 4725000 16 Sale 27,000 160 40500 87.5 3543750 3543750 28 Sale 25,500 160 15000 87.5 1312500 1312500 Mar. 5 Purchase 45,000 89.5 15000 87.5 1312500 5340000 45000 89.5 4027500 14 Sale 30,000 160 30000 89.5 2685000 2685000 25 Purchase 7,500 90 30000 89.5 2685000 3360000 7500 90 675000 30 Sale 26,250 160 3750 89.5 335625 7500 90 675000 1010625 2 LIFO METHOD Date Transaction Number of Units Per Unit units rate stock total stock Jan. 1 Inventory 7,500 $ 75.00 7500 75 562500 562500 10 Purchase 22,500 85 7500 75 562500 2475000 22500 85 1912500 28 Sale 11,250 150 7500 75 562500 1518750 11250 85 956250 30 Sale 3,750 150 7500 75 562500 1200000 7500 85 637500 Feb. 5 Sale 1,500 150 7500 75 562500 1072500 6000 85 510000 10 Purchase 54,000 87.5 7500 75 562500 5797500 6000 85 510000 54000 87.5 4725000 16 Sale 27,000 160 7500 75 562500 3435000 6000 85 510000 27000 87.5 2362500 28 Sale 25,500 160 7500 75 562500 1203750 6000 85 510000 1500 87.5 131250 Mar. 5 Purchase 45,000 89.5 7500 75 562500 5231250 6000 85 510000 1500 87.5 131250 45000 89.5 4027500 14 Sale 30,000 160 7500 75 562500 2546250 6000 85 510000 1500 87.5 131250 15000 89.5 1342500 25 Purchase 7,500 90 7500 75 562500 3221250 6000 85 510000 1500 87.5 131250 15000 89.5 1342500 7500 90 675000 30 Sale 26,250 160 7500 75 562500 881250 3750 85 318750
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