Sprint Shoes Inc. had a beginning inventory of 9,150 units on January 1, 20X1. T

Question

Sprint Shoes Inc. had a beginning inventory of 9,150 units on January 1, 20X1. The costs associated with the inventory were:

During 20X1, the firm produced 42,800 units with the following costs:
  

Sales for the year were 47,310 units at $42.60 each. Sprint Shoes uses LIFO accounting.

a. What was the gross profit? (Do not round intermediate calculations.)
  

b. What was the value of ending inventory? (Do not round intermediate calculations.)
  

Explanation / Answer

Part - (a) Sprint Shoes, Inc. Particulars Amount ($) Sales (47,310*42.6)      2,015,406 Cost of goods sold New inventory Units (15.5+7.8+8.3)         42,800 Cost per unit           31.60 Total        1,352,480 Old inventory Units (47,310-42,800)           4,510 Cost per unit (13+8+6.1)           27.10 Total           122,221 Total cost of goods sold      1,474,701 Gross profit         540,705 Part - (b) Value of ending inventory Beginning inventory (9,150*27.1)       247,965 Add : Total Production    1,352,480 (42,800*31.6) Total inventory available for sale    1,600,445 Less : Cost of goods sold    1,474,701 Ending inventory       125,744

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