Montoure Company uses a perpetual inventory system. It entered into the followin

Question

Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions.
  

  
Required:
1. Compute cost of goods available for sale and the number of units available for sale.

Date Activities Units Acquired at Cost Units Sold at Retail Jan. 1 Beginning inventory 600 units @ $45 per unit Feb. 10 Purchase 400 units @ $42 per unit Mar. 13 Purchase 200 units @ $27 per unit Mar. 15 Sales 800 units @ $75 per unit Aug. 21 Purchase 100 units @ $50 per unit Sept. 5 Purchase 500 units @ $46 per unit Sept. 10 Sales 600 units @ $75 per unit Totals 1,800 units 1,400 units Cost of goods available for sale Number of units available for sale units

Explanation / Answer

1. cost of goods available for sale is $72,000 and the number of units available for sale is 1,800 units is as calculated below:

2. number of units in ending inventory is 400 (1,800 total units minus 1,400 goods sold.

3. Cost of Ending Inventory

4.

gross profit earned by the company for each of the four costing methods

Date Activities Units Acquired at Cost @ Jan. 1 Beginning inventory 600 units 45 27,000 Feb. 10 Purchase 400 units 42 16,800 Mar. 13 Purchase 200 units 27 5,400 Aug. 21 Purchase 100 units 50 5,000 Sept. 5 Purchase 500 units 46 23,000 Cost of goods available for sale 1,800 units 77,200

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