Fit Universe began July with merchandise inventory of 90 crates of vitamins that

Question

Fit Universe began July with merchandise inventory of 90 crates of vitamins that cost a total of $5,850. During the month, Fit Universe purchased and sold merchandise on account as follows: l (Click the icon to view the transactions.) Read the requirements Requirement 1. Prepare a perpetual inventory record, using the FIFO inventory costing method, and determine the company's cost of goods sold, ending merchandise inventory, and gross profit. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Purchases Cost of Goods Sold Inventory on Hand Unit Total Total Unit Total Date Quantity Cost Cost Quantity Cost Cost Quantity Cost Cost Jul. 1 Totals

Explanation / Answer

Answer 1. FIFO Date Purchases Cost of Goods Sold Balance Unit Cost Total Unit Cost Total Unit Cost Total 1-Jul                90         65.00            5,850 5-Jul                      130             76.00              9,880                90         65.00            5,850             130         76.00            9,880             220          15,730 13-Jul                  90         65.00            5,850                80         76.00            6,080                  50         76.00            3,800                140            9,650 18-Jul                      170             86.00            14,620                80         76.00            6,080             170         86.00          14,620             250          20,700 26-Jul                  80         76.00            6,080                70         86.00            6,020                100         86.00            8,600                180          14,680 Total                      300            24,500                320          24,330 Sales           33,640 Cost of Goods Sold           24,330 Gross Margin             9,310 Answer 2. LIFO Date Purchases Cost of Goods Sold Balance Unit Cost Total Unit Cost Total Unit Cost Total 1-Jul                90         65.00            5,850 5-Jul                      130             76.00              9,880                90         65.00            5,850             130         76.00            9,880             220          15,730 13-Jul                130         76.00            9,880                80         65.00            5,200                  10         65.00                650                140          10,530 18-Jul                      170             86.00            14,620                80         65.00            5,200             170         86.00          14,620             250          19,820 26-Jul                170         86.00          14,620                70         65.00            4,550                  10         65.00                650                180          15,270 Total                      300            24,500                320          25,800 Sales           33,640 Cost of Goods Sold           25,800 Gross Margin             7,840 Answer 3. Weighted Average Date Purchases Cost of Goods Sold Balance Unit Cost Total Unit Cost Total Unit Cost Total 1-Jul                90         65.00            5,850 5-Jul                      130             76.00              9,880                90         65.00            5,850             130         76.00            9,880             220         71.50          15,730 13-Jul                140         71.50          10,010                80         71.50            5,720 18-Jul                      170             86.00            14,620                80         71.50            5,720             170         86.00          14,620             250         81.36          20,340 26-Jul                180         81.36          14,645                70         81.36            5,695 Total                      300            24,500                320          24,655 Sales           33,640 Cost of Goods Sold           24,655 Gross Margin             8,985 Answer 4. If the Company Wants to pay least tax, it should choose LIFO Method. Since the Gross Profit is lowest in LIFo Method.

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