Aloha Company uses a perpetual inventory It entered into the following calender-

Question

Aloha Company uses a perpetual inventory It entered into the following calender-year 2015 purchases and sales transactions. (for specific identification the May 9 sale consisted of 80 units from the May 6 purchases and 100 units from the May 25 purchase.) Compute cost of goods available for sale and the number of units available for sale. compute the number o9f units in ending inventory. Compute the cost assigned to ending inventory Compute the cost assigned to ending inventory using FIFO LIFO, weighted average and Specific identification (Round all amounts to cents.) Compute gross profit earned by the company for each of the company for the four costing methods in part 3.

Explanation / Answer

1)

Cost of the goods available for sale

= cost of beginning inventory + cost of goods purchased

= 150 units @ $300 per unit + 350 units @ $350 per unit + 80 units @ $450 per unit + 100 units @ $458 per unit = $296355

2)

Number of units in ending inventory

= Number of units available for sale - Number of units sold

= (150 + 350 + 80 + 100) - (180 + 300)

= 680 units - 480 units

= 200 units

3)

Cost assigned to ending inventory under FIFO

= 100 units @ $458 per unit + 80 units @ $ 450 per unit + 20 units @ $ 350 per unit

= 45800 + 36000 + 7000

= $88800

Cost assigned to ending inventory under LIFO

= 150 units @ $300 per unit + 50 units @ $350 per unit

= $62500

Cost assigned to ending inventory under Weighted Average Method:

Cost of ending inventory = $75600

Date Goods Purchased Cost of goods sold Inventory Balance No. Of units Cost perunit no. Of units cost per unit cost of goods sold no of units cost per unit ($) inventory balance May-01 150 @ 300.00 = 45000 May-06 350 @ 350 150 @ 300.00 = 45000 350 @ 350.00 = 122500 500 @ 335.00 167500 May-09 180 @ 335.00 = 60300.00 320 @ 335.00 = 107200 May-17 80 @ 450 320 @ 335.00 = 107200 80 @ 450.00 = 36000 400 @ 358.00 = 143200 Jan-00 100 @ 458 400 @ 358.00 = 143200 100 @ 458.00 = 45800 500 @ 378.00 = 189000 May-30 300 @ 378.00 = 113400 200 @ 378.00 = 75600

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