Use the following information to answer questions 22 through 25. AAA Co. uses a

Question

Use the following information to answer questions 22 through 25. AAA Co. uses a periodic inventory system and has the following information in regard to its inventory: Beginning inventory Purchase on January 25 Purchase on March 15 Purchase on October 2 250 units @40$10,000 350 units 4214,700 550 units 44 24,200 450units @ 46-20.200 Goods available for sale 1600 units AAA Co. sold 700 units at a selling price of $72 22. What is the cost of ending inventory using the weighted average method? A. $38,700 B. $30,450 C. $30,100 D. $39,150 23. What is the cost of ending inventory using the LIFO method? A. $31,700 B. $29,100 C. $40,500 D. $37,900 24. What is the amount of the cost of goods sold using the FIFO method? A. $29,100 B. $31,700 C. $37,900 D. $40,500 25. What is the gross profit percentage using the LIFO method? (Round final percentage amount to 1 decimal place.) A. 42.3% B. 37.1% C. 24.8% D. 19.6%

Explanation / Answer

Answer:- Weighted average cost per unit = $69600/ 1600 units = $43.5 per unit

Total sold units = 700 units

Closing inventory = 1600 units – 700 units = 900 units

22)- Cost of ending inventory using weighted average method

                         = 900 units * $43.5 per unit = $39150

23)

Cost of closing inventory LIFO method = $37900 (Part D)

24)-

Cost of closing inventory FIFOP method = $40500 (Part D)

25)-

Cost of closing inventory (LIFO method) Date Opening stock Purchases Sales Closing stock Units Rate per unit amount Units Rate per unit amount Units Rate per unit amount Units Rate per unit amount 01-Jan 250 40 10000 250 40 10000 25-Jan 250 40 10000 350 42 14700 250 40 10000 350 42 14700 15-Mar 250 40 10000 550 44 24200 250 40 10000 350 42 14700 350 42 14700 550 44 24200 02-Oct 250 40 10000 450 46 20700 250 40 10000 350 42 14700 350 42 14700 550 44 24200 550 44 24200 450 46 20700 250 40 10000 450 46 20700 250 40 10000 350 42 14700 250 44 11000 350 42 14700 550 44 24200 300 44 13200 450 46 20700

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