Required information Problem 6-2AA Periodic: Alternative cost flows LO P3 The fo
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Required information Problem 6-2AA Periodic: Alternative cost flows LO P3 The following information applies to the questions displayed below.] Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions for March. Activities Units Sold at Retail Units Acquired at Cost 185 units $75 per unit 485 units $80 per unit Date Mar. Mar. 5 Purchase Mar. 9 Sales Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales 1 Beginning inventory 505 units $110 per unit 290 units $85 per unit 370 units $87 per unit 330 units e $120 per unit 835 units Totals 1,330 units For specific identification, the March 9 sale consisted of 40 units from beginning inventory and 465 units from the March 5 purchase; the March 29 sale consisted of 125 units from the March 18 purchase and 205 units from the March 25 purchase Problem 6-2AA Part 3 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification (Round your average cost per unit to 2 decimal places.)Explanation / Answer
a. FIFO METHOD Date Activities Unit Aquire at Cost Unit Sold at Retails Ending Inventory at Cost VALUE Mar-01 Beginning Inventory 185 Unit @ 75 185 x 75 Mar-05 Purchase 485 Unit @ 80 185 x 75 ; 485 x 80 Mar-09 Sales 505 unit @ 110 165 x 80 Mar-18 Purchase 290 Unit @ 85 165 x 80 ; 290 x 85 Mar-25 Purchase 370 Unit @ 87 165 x 80 ; 290 x 85 ; 370 x 87 Mar-29 Sales 330 Unit @ 120 125 x 85; 370 x 87 42815 b. LIFO METHOD Date Activities Unit Aquire at Cost Unit Sold at Retails Ending Inventory at Cost VALUE Mar-01 Beginning Inventory 185 Unit @ 75 185 x 75 Mar-05 Purchase 485 Unit @ 80 185 x 75 ; 485 x 80 Mar-09 Sales 505 unit @ 110 165 x 75 Mar-18 Purchase 290 Unit @ 85 165 x 75 ; 290 x 85 Mar-25 Purchase 370 Unit @ 87 165 x 75 ; 290 x 85 ; 370 x 87 Mar-29 Sales 330 Unit @ 120 165 x 75 ; 290 x 85 ; 40 x 87 40505 c. AVERAGE COST Date Activities Cost of goods available for sale Cost of Goods Sold Ending Inventory Unit average cost Total Cost Unit average cost Total Cost Unit average cost Total Cost Mar-01 Beginning Inventory 185 75 13875 185 75.00 13,875.00 Mar-05 Purchase 485 80 38800 670 78.62 52,675.00 Mar-09 Sales 505 78.62 39,702.80 165 78.62 12,972.20 Mar-18 Purchase 290 85 24650 455 82.69 37,622.20 Mar-25 Purchase 370 87 32190 825 84.62 69,812.20 Mar-29 Sales 330 84.62 27,924.88 495 84.62 41,887.32 d.SPECIFIC IDENTIFICATION Date Activities Cost of goods available for sale Cost of Goods Sold Ending Inventory Unit average cost Total Cost Unit average cost Total Cost Unit average cost Total Cost Mar-01 Beginning Inventory 185 75 13875 185 75.00 13,875.00 Mar-05 Purchase 485 80 38800 185 75.00 13,875.00 Mar-05 485 80.00 38,800.00 Mar-09 Sales 40 75.00 3,000.00 145 75.00 10,875.00 Mar-09 Sales 465 80.00 37,200.00 20 80.00 1,600.00 Mar-18 Purchase 290 85 24650 145 75.00 10,875.00 20 80.00 1,600.00 290 85.00 24,650.00 Mar-25 Purchase 370 87 32190 145 75.00 10,875.00 20 80.00 1,600.00 290 85.00 24,650.00 370 87.00 32,190.00 Mar-29 Sales 125 85.00 10,625.00 145 75.00 10,875.00 205 87.00 17,835.00 20 80.00 1,600.00 165 85.00 14,025.00 165 87.00 14,355.00 FIFO LIFO Weighted Average Specific Identification SALE 95,150 95,150 95,150 95,150 COST OF GOODS SOLD 66,700 69,010 67,628 68,660 GROSS PROFIT 28,450 26,140 27,522 26,490
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