Warnerwoods Company uses a perpetual inventory system. It entered into the follo

Question

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.

4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 135 units from beginning inventory and 265 units from the March 5 purchase; the March 29 sale consisted of 115 units from the March 18 purchase and 155 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Beginning inventory 240 units @ $53.80 per unit Mar. 5 Purchase 295 units @ $58.80 per unit Mar. 9 Sales 400 units @ $88.80 per unit Mar. 18 Purchase 155 units @ $63.80 per unit Mar. 25 Purchase 290 units @ $65.80 per unit Mar. 29 Sales 270 units @ $98.80 per unit Totals 980 units 670 units

Explanation / Answer

STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ 1-Mar 240 53.8 12912 5-Mar 295 58.8 17346 240 53.8 12912 295 58.8 17346 9-Mar 240 53.8 12912 135 58.8 7938 160 58.8 9408 18-Mar 155 63.8 9889 135 58.8 7938 155 63.8 9889 25-Mar 290 65.8 19082 135 58.8 7938 155 63.8 9889 290 65.8 19082 29-Mar 135 58.8 7938 20 63.8 1276 135 63.8 8613 290 65.8 19082 TOTAL 740 46317 670 38871 310 20358 STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL LIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ 1-Mar 240 53.8 12912 5-Mar 295 58.8 17346 240 53.8 12912 295 58.8 17346 9-Mar 295 58.8 17346 135 53.8 7263 105 53.8 5649 18-Mar 155 63.8 9889 135 53.8 7263 155 63.8 9889 25-Mar 290 65.8 19082 135 53.8 7263 155 63.8 9889 290 65.8 19082 29-Mar 270 65.8 17766 135 53.8 7263 155 63.8 9889 20 65.8 1316 TOTAL 740 46317 670 40761 310 18468 STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL WEIGHTED AVERAGE METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ 1-Mar 240 53.8 12912 5-Mar 295 58.8 17346 240 53.8 12912 295 58.8 17346 Average 535 56.56 30258 9-Mar 400 56.56 22624 135 56.56 7634 18-Mar 155 63.8 9889 135 56.56 7634 155 63.8 9889 25-Mar 290 65.8 19082 135 56.56 7634 155 63.8 9889 290 65.8 19082 Average 580 63.11 36605 29-Mar 270 63.11 17040 310 63.11 19565 TOTAL 740 46317 670 39664 310 63.11 19565 STATEMENT SHOWING INVENTORY RECORD UNDER SPECIFIC IDENTIFICATION RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ 1-Mar 240 53.8 12912 5-Mar 295 58.8 17346 240 53.8 12912 295 58.8 17346 9-Mar 135 53.8 7263 105 53.8 5649 265 58.8 15582 30 58.8 1764 18-Mar 155 63.8 9889 105 53.8 5649 30 58.8 1764 155 63.8 9889 25-Mar 290 65.8 19082 105 53.8 5649 30 58.8 1764 155 63.8 9889 290 65.8 19082 29-Mar 115 63.8 7337 105 53.8 5649 155 65.8 10199 30 58.8 1764 40 63.8 2552 135 65.8 8613 TOTAL 740 46317 670 40381 310 18578 GROSS PROFIT FIFO LIFO AVERAGE SPECIFIC sales (400 unist @88.80+ 270 units @98.80) 62196 62196 62196 62196 Less: COGS 38871 40761 39664 40381 Gross profits 23325 21435 22532 21815

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