CRP3 Q- Search in Document Home Insert Design Layout References Mailings Review

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CRP3 Q- Search in Document Home Insert Design Layout References Mailings Review View Share AaBbCcDdE AaBbCcDdE AaBbCcDd AaBbCcDdEe aBbCcDdE AoBbCCOdEe Paste NormalNo Spacing He ng 1Heading 2 SubtitleSubtle Emph. Problem 9 The following transactions affected Alpenrose Corporation's merchandise inventory during the month of March, 2016: March 1 - Inventory on hand-3,000 units; cost $8.00 each. March 8 _ Purchased 5,000 units for S8.20 cach on account. March 14_Sold 4,000 units for S14.00 cach on account. March 18_Purchased 6,000 units for $8.40 each on account. March 25_Sold 2,000 units for $14.00 each on account. March 31 - Inventory on hand-8,000 units. Part 1. Assume Alpenrose uses perpetual inventory system. Determine the inventory balance Alpenrose would report on its March 31, 2016, balance sheet and the cost of goods sold it would report on its March, 2016, income statement using each of the following cost flow methods: I.First-in, first-out (FIFO) 2.Last-in, first-out (LIFO) Part 2. Assume Alpenrose uses periodic inventory system. Determine the inventory balance Alpenrose would report on its March 31, 2016, balance sheet and the cost of goods sold it would report on its March, 2016, income statement using each of the following cost flow methods 1. First-in, first-out (FIFO) 2.Last-in, first-out (LIFO) 3.Average cost (round the avcrage cost per unit to the nearest dollar) Page 7 of 11 1916 Words English (US) Focus 134%

Explanation / Answer

Answer

Perpetual System + FIFO

FIFO

Opening + Purchases

Cost of Goods Sold

Closing Inventory

Opening Mar 1

3000

8.00

24000

3000

8.00

24000.00

Mar 8 Purchase

5000

8.20

41000

3000

8.00

24000.00

5000

8.20

41000.00

mar 14 Sales

3000

8.00

24000

4000

8.20

32800.00

1000

8.20

8200

Mar 18 Purchased

6000

8.40

50400

4000

8.20

32800.00

6000

8.40

50400.00

Mar 25 Sales

2000

8.20

16400

2000

8.20

16400.00

6000

8.40

50400.00

TOTAL

14000

115400

6000

48600

8000

66800

Perpetual System + LIFO

LIFO

Opening + Purchases

Cost of Goods Sold

Closing Inventory

Opening Mar 1

3000

8.00

24000

3000

8.00

24000.00

Mar 8 Purchase

5000

8.20

41000

3000

8.00

24000.00

5000

8.20

41000.00

mar 14 Sales

4000

8.20

32800

3000

8.00

24000.00

1000

8.20

8200.00

Mar 18 Purchased

6000

8.40

50400

3000

8.00

24000.00

1000

8.20

8200.00

6000

8.40

50400.00

Mar 25 Sales

2000

8.40

16800

3000

8.00

24000.00

1000

8.20

8200.00

4000

8.40

33600.00

TOTAL

14000

115400.00

6000

49600.00

8000

65800

Periodic Method + FIFO

FIFO

Cost of Goods available for sale

Cost of Goods Sold

Endging Inventory

Units

Cost/unit

COG for sale

Units sold

Cost/unit

COGS

Units

Cost/unit

Ending inventory

Beginning Inventory

3000

8

24000

3000

8

24000

0

0

0

Purchases:

Mar-08

5000

8.2

41000

3000

8.2

24600

2000

0

16400

Mar-18

6000

8.4

50400

0

6000

8.4

50400

0

0

0

0

TOTAL

14000

115400

6000

48600

8000

66800

Periodic Method + LIFO

LIFO

Cost of Goods available for sale

Cost of Goods Sold

Endging Inventory

Units

Cost/unit

COG for sale

Units sold

Cost/unit

COGS

Units

Cost/unit

Ending inventory

Beginning Inventory

3000

8

24000

8

0

3000

0

24000

Purchases:

Mar-08

5000

8.2

41000

8.2

0

5000

0

41000

Mar-18

6000

8.4

50400

6000

8.4

50400

0

0

0

0

0

0

0

TOTAL

14000

115400

6000

50400

8000

65000

Periodic Method + Average Method

Cost of Goods available for sale

Cost of Goods Sold

Ending Inventory

Units

Cost per unit

Cost of Goods Available for sale

Units Sold

Cost per unit

Cost of Goods Sold

Units

Cost per unit

Ending Inventory

Beginning Inventory

3000

8

24000

Purchases:

Mar-08

5000

8.2

41000

Mar-18

6000

8.4

50400

0

Total

14000

8

115400

6000

8

48000

8000

8

64000

NOTE: Average price = Cost of Goods available for sale / No. of units in opening + purchased
= 115400 / 14000 = 8.2428… rounded off to $8 per unit

FIFO

Opening + Purchases

Cost of Goods Sold

Closing Inventory

Opening Mar 1

3000

8.00

24000

3000

8.00

24000.00

Mar 8 Purchase

5000

8.20

41000

3000

8.00

24000.00

5000

8.20

41000.00

mar 14 Sales

3000

8.00

24000

4000

8.20

32800.00

1000

8.20

8200

Mar 18 Purchased

6000

8.40

50400

4000

8.20

32800.00

6000

8.40

50400.00

Mar 25 Sales

2000

8.20

16400

2000

8.20

16400.00

6000

8.40

50400.00

TOTAL

14000

115400

6000

48600

8000

66800

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