Stewart Company reports the following inventory records for November 2014: Calcu

Question

Stewart Company reports the following inventory records for November 2014:

Calculate the cost of ending inventory and the cost of goods sold under each of the following methods using periodic inventory system

What is the gross profit percentage under the FIFO method?

What is net income under the LIFO method?

Stewart applied the lower of cost or market method to value its inventory for reporting purposes at the end of the month. Assuming Stewart used the FIFO method and that inventory had a market replacement value of $17.40 per unit, what would Stewart report on the balance sheet for inventory?

Date Activity Number of Units Cost/Unit November 1 Beg 125 19 November 4 Purchase 350 20 November 7 Sale (@ $58 per unit) 210 November 13 Purchase 515 22 November 22 Sale (@ 58 per unit) 555

Explanation / Answer

Inventory Using FIFO Details Unit Rate Amt $ Sales revenue Opening Balance 125                19.0          2,375.0 Purchases Nov 4. 350                20.0          7,000.0 Nov 13. 515                22.0        11,330.0 Total Purchase 865        18,330.0 Total Goods available for sale 990        20,705.0 Sales Nov 7. 125                19.0          2,375.0        7,250 85                20.0          1,700.0        4,930 Nov 22. 265                20.0          5,300.0      15,370 290                22.0          6,380.0      16,820 Total Sales 765        15,755.0      44,370 Closing Stock              225.0                22.0          4,950.0 Inventory Using LIFO Details Unit Rate Amt $ Sales revenue Opening Balance 125                19.0          2,375.0 Purchases Nov 4. 350                20.0          7,000.0 Nov 13. 515                22.0        11,330.0 Total Purchase 865        18,330.0 Total Goods available for sale 990        20,705.0 Sales Nov 7. 210                20.0          4,200.0      12,180 0                     -                       -                 -   Nov 22. 515                22.0        11,330.0      29,870 40                20.0              800.0        2,320 Total Sales 765        16,330.0      44,370 Closing Stock              225.0                19.4          4,375.0 Inventory Using Wtd Average Details Unit Rate Amt $ Sales revenue Opening Balance 125                19.0          2,375.0 Purchases Nov 4. 350                20.0          7,000.0 Nov 13. 515                22.0        11,330.0 Total Purchase 865        18,330.0 Total Goods available for sale 990                20.9        20,705.0 Sales Nov 7. 210                20.9          4,392.0      12,180 0                     -                       -                 -   Nov 22. 555                20.9        11,607.3      32,190                     -                 -   Total Sales 765        15,999.3      44,370 Closing Stock              225.0                20.9          4,705.7 1a Method Ending Inventory COGS FIFO              4,950           15,755 LIFO              4,375           16,330 Wtd Average              4,706           15,999 2a FIFO method Sales revenue            44,370 Cost of Goods sold            15,755 Gross Profit            28,615 Gross Profit % 64.5% 2b LIFO method Sales revenue            44,370 Cost of Goods sold            16,330 Gross Profit            28,040 Net Income cannot be derived   with given data        3 FIFI Method Units Rate Amt Ending Inventory                  225              22.00              4,950 Replacement cost                  225              17.40              3,915 At Lower of cost or market   basis Stewart will report   the inventory amount $3915 in Nov Balance Sheet.

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