Warnerwoods Company uses a periodic inventory system. It entered into the follow
ID: 2343216 • Letter: W
Question
Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions for March. For specific identification, the March 9 sale consisted of 50 units from beginning inventory and 385 units from the March 5 purchase; the March 29 sale consisted of 55 units from the March 18 purchase and 135 units from the March 25 purchase. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places and final answers to nearest whole dollar.)
Required information [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. Units Acquired at Date Mar. Mar. 5 Purchase Mar. 9 Sales Mar.18 Purchase Mar.25 Purchase Mar.29 Sales Activities Units Sold at Retail Cost 115 units « $50 per 415 units « $55 per 1 Beginning inventory unit unit per 435 units e $85 unit 150 units* $60 per 230 units $62 per unit unit 190 units $95 per unit Totals 910 units 625 units For specific identification, the March 9 sale consisted of 50 units from beginning inventory and 385 units from the March 5 purchase; the March 29 sale consisted of 55 units from the March 18 purchase and 135 units from the March 25 purchase 4. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places and final answers to nearest whole dollar.) WeightedSpecific Average Identificati FIFO LIFO Sales Less: Cost of goods sold Gross profitExplanation / Answer
FIFO
LIFO
Weighted Avg
Specific Identification
Sales
55025
55025
55025
55025
(-) COGS
34275
36735
35601
35345
Gross Profit
20750
18290
19424
19680
(1) Periodic FIFO :-
FIFO
Cost of Goods Available for Sale
Cost of Goods Sold-Periodic FIFO
Ending Inventory-Periodic FIFO
# of units
Cost pu
Cost of Goods Available for Sale
# of units
Cost pu
Cost of Goods Sold-Periodic FIFO
# of units
Cost pu
Ending Inventory-Periodic FIFO
Beginning Inventory
115
50
5750
115
50
5750
-
-
Purchases:-
March 5
415
55
22825
415
55
22825
March 18
150
60
9000
95
60
5700
55
60
3300
March 25
230
62
14260
-
-
230
62
14260
Total
910
51835
625
34275
285
17560
(2) Periodic LIFO :-
LIFO
Cost of Goods Available for Sale
Cost of Goods Sold-Periodic LIFO
Ending Inventory-Periodic LIFO
# of units
Cost pu
Cost of Goods Available for Sale
# of units
Cost pu
Cost of Goods Sold-Periodic LIFO
# of units
Cost pu
Ending Inventory-Periodic LIFO
Beginning Inventory
115
50
5750
-
-
115
50
5750
Purchases:-
March 5
415
55
22825
245
55
13475
170
55
9350
March 18
150
60
9000
150
60
9000
March 25
230
62
14260
230
62
14260
-
-
Total
910
51835
625
36735
285
15100
(3) Average cost :-
Average cost
Cost of Goods Available for Sale
Cost of Goods Sold
Ending Inventory
# of units
Cost pu
Cost of Goods Available for Sale
# of units
Cost pu
Cost of Goods Available for Sale
# of units
Cost pu
Cost of Goods Available for Sale
Beginning Inventory
115
50
5750
625 56.96 35600
285 56.96 16234
Purchases:-
March 5
415
55
22825
March 18
150
60
9000
March 25
230
62
14260
Total
910
51835
625
35601
285
16234
Avg cost per unit = Total cost available for sale/No of units available for sale
= 51835/910 = 56.96
(4) Specific Identification :-
Specific Identification
Cost of Goods Available for Sale
Cost of Goods Sold
Ending Inventory
# of units
Cost pu
Cost of Goods Available for Sale
# of units
Cost pu
Cost of Goods Sold
# of units
Cost pu
Ending Inventory
Beginning Inventory
115
50
5750
50
50
2500
65
50
3250
Purchases:-
March 5
415
55
22825
385
55
21175
30
55
1650
March 18
150
60
9000
55
60
3300
95
60
5700
March 25
230
62
14260
135
62
8370
95
62
5890
Total
910
51835
625
35345
285
16490
FIFO
LIFO
Weighted Avg
Specific Identification
Sales
55025
55025
55025
55025
(-) COGS
34275
36735
35601
35345
Gross Profit
20750
18290
19424
19680
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