fill the blank Tempo Ltd. is a retailer operating in Dartmouth, Nova Scotia. Tem
ID: 2451598 • Letter: F
Question
fill the blank
Tempo Ltd. is a retailer operating in Dartmouth, Nova Scotia. Tempo uses the perpetual inventory method. All sales returns from customers result in the goods being returned to inventory; the inventory is not damaged. Assume that there are no credit transactions; all amounts are settled in cash. You are provided with the following information for Tempo Ltd. for the month of January 2014. For each of the following cost flow assumptions, calculate (i) cost of goods sold, (ii) ending inventory, and (iii) gross profit. (1) FIFO. (2) Moving-average cost.Explanation / Answer
FIFO
Cost of goods Sold=16825
Ending Inventory=Total Purchase cost-Cost of goods sold
Ending Inventory=20425-16825=3600
Gross Profit=Total revenue-Cost of goods sold=37875-16825=21050
Moving Average
Total Unit Sold=375-25+125+400=875 unit
Total unit Available=375+250+188-38+250=1025
Balance=1025-875
Average cost= Total Purchase cost /Units Available=20425/1025=19.927
Cost of goods sold=Unit sold*Average cost=875*19.927=17436.125=17436
Ending Inventory=Balance unit*Average cost=150*19.927=2989.05=2989
Gross Profit= Total revenue-Cost of goods sold=37875-17436.125=20438.875=20439
Date Description Quantity Unit Cost Unit Cost (FIFO) Cost of good sold Purchase cost Revenue 31-Dec Ending Inv 375 17 6375 02-Jan Purchase 250 19 4750 06-Jan Sale 375 38 17 6375 14250 09-Jan Sale ret -25 38 17 -425 -950 09-Jan Purchase 188 22 4136 10-Jan Purchase ret -38 22 -836 10-Jan Sale 125 43 17@25 unit+19@100 unit 2325 5375 23-Jan Purchase 250 24 6000 30-Jan Sale 400 48 19@150 unit+22@150 unit+24@100 unit 8550 19200 Total 16825 20425 37875Related Questions
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