Ending inventory consisted of 70 units. Mason sold 572 units at $174 each. All p
ID: 2509545 • Letter: E
Question
Ending inventory consisted of 70 units. Mason sold 572 units at $174 each. All purchases and sales were made with cash. Operating expenses amounted to $4,425.
Required
Compute the gross margin for Mason Company using the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. (Round cost per unit to 3 decimal places and final answers to the nearest whole dollar amount.)
What is the amount of net income using FIFO, LIFO, and weighted average? (Ignore income tax considerations.) (Round cost per unit to 3 decimal places and other intermediate answer and final answers to the nearest whole dollar amount.)
Compute the amount of ending inventory using (1) FIFO, (2) LIFO, and (3) weighted average. (Round cost per unit to 3 decimal places and final answers to the nearest whole dollar amount.)
The following information pertains to Mason Company for 2016:Explanation / Answer
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC FIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ Balance Oct1 172 58 9976 172 58 9976 Purchasse 470 87 40890 400 87 34800 70 87 6090 TOTAL 642 50866 572 44776 70 6090 STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC LIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ Balance Oct1 172 58 9976 102 58 5916 70 58 4060 Purchasse 470 87 40890 470 87 40890 TOTAL 642 50866 572 46806 70 4060 STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC WEIGHTED AVERAGE METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ Balance Oct1 172 58 9976 Purchasse 470 87 40890 TOTAL 642 79.23 50866 572 79.23 45320 70 79.23 5546 Req a: FIFO LIFO Average Sales revenue (572 units @ 174) 99528 99528 99528 Less: Cost fo goods sold 44776 46806 45320 Gross profit 54752 52722 54208 Req b: FIFO LIFO Average Sales revenue (572 units @ 174) 99528 99528 99528 Less: Cost fo goods sold 44776 46806 45320 Gross profit 54752 52722 54208 Less: Ooperating expense 4425 4425 4425 Net income 50327 48297 49783 Req C: FIFO LIFO AVERAGE ENDING INVENTORY 6090 4060 5546
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