fifo, lifo, weighted average, specific identification for a company uses a perpe
ID: 2448566 • Letter: F
Question
fifo, lifo, weighted average, specific identification for a company uses a perpetual inventory system. It enter into the follwowing purchaes and sale transactions for march. March 1 beginning inventory130 units @ $51.60/unit March 5 Purchase 240units @$56.60/unit Mar 9 Sales 290units@ $86.60/unit March 18 Purchase 100 units@61.60/unit March 25 Purchase 180 units@$63.60 March 29 sales 160 units $96.60/unit
Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 210 units from the March 5 purchase; the March 29 sale consisted of 60 units from the March 18 purchase and 100 units from the March 25 purchase. (Round average cost per unit to 2 decimal places.)
Explanation / Answer
FIFO method Purchase Sales Balance Date Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount Mar.1 130 51.6 6708 March.5 240 $ 56.60 $ 13,584.00 240 $ 56.60 $ 13,584.00 130 51.6 6708 March.9 130 51.6 6708 160 $ 56.60 9056 80 $ 56.60 4528 Mar.18 100 61.6 $ 6,160.00 100 61.6 $ 6,160.00 80 $ 56.60 4528 March.25 180 63.6 $ 11,448.00 180 63.6 $ 11,448.00 100 61.6 $ 6,160.00 80 $ 56.60 4528 Mar.29 80 $ 56.60 $ 4,528.00 80 61.6 $ 4,928.00 180 63.6 $ 11,448.00 20 61.6 $ 1,232.00 Total 450 25220 Sales: 290 unit @86.60 25114 160 units @96.60 15456 Total Sales 40570 Less: Cost of Goods sold 25220 Gross profit 15350 LIFO method Purchase Sales Balance Date Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount Mar.1 130 51.6 6708 March.5 240 $ 56.60 $ 13,584.00 240 $ 56.60 $ 13,584.00 130 51.6 6708 March.9 50 51.6 2580 240 $ 56.60 13584 80 $ 51.60 4128 Mar.18 100 61.6 $ 6,160.00 100 61.6 $ 6,160.00 80 $ 51.60 4128 March.25 180 63.6 $ 11,448.00 180 63.6 $ 11,448.00 100 61.6 $ 6,160.00 80 $ 51.60 4128 Mar.29 160 $ 63.60 $ 10,176.00 20 63.6 $ 1,272.00 100 61.6 $ 6,160.00 80 $ 51.60 $ 4,128.00 Total 450 26340 Sales: 290 unit @86.60 25114 160 units @96.60 15456 Total Sales 40570 Less: Cost of Goods sold 26340 Gross profit 14230 Weighted Average method method Purchase Sales Balance Date Quantity Rate Amount Quantity Rate Amount Quantity Rate Amount Mar.1 130 51.6 6708 March.5 240 $ 56.60 $ 13,584.00 370 $ 54.84 $ 20,292.00 March.9 290 $ 54.84 15904.5405 80 $ 54.84 $ 4,387.46 Mar.18 100 61.6 $ 6,160.00 180 $ 58.60 $ 10,547.46 March.25 180 63.6 $ 11,448.00 360 $ 61.10 $ 21,995.46 Mar.29 160 $ 61.10 $ 9,775.76 200 $ 61.10 $ 12,219.70 Total 450 25680.30 Sales: 290 unit @86.60 25114 160 units @96.60 15456 Total Sales 40570 Less: Cost of Goods sold 25680.30 Gross profit 14889.70 Specific Identification Method: Sales 40570 Less: Cost of Goods Sold: From Beginning Inventory-80 x 51.6 4128 From March.5 purchase-210 x 56.60 11886 from March 18 purchase: 60 x 61.60 3696 from 25th March purchase:63.60 x 100 6360 Total Cost of goods sold 26070 Gross Profit 14500
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