Required information Problem 6-2AA Periodic: Alternative cost flows LO P3 The fo

Question

Required information Problem 6-2AA Periodic: Alternative cost flows LO P3 The following information applies to the questions displayed below.] Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions for March Activities Units Sold at Retail Units Acquired at Cost 145 units $80 per unit 445 units $85 per unit Date Mar. 1 Beginning inventory Mar. 5 Purchase Mar 9 Sales Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales 465 unitse $115 per unit 210 units $90 per unit 290 units $92 per unit 250 unitse $125 per unit 715 units Totals 1,090 units For specific identification, the March 9 sale consisted of 90 units from beginning inventory and 375 units from the March 5 purchase; the March 29 sale consisted of 85 units from the March 18 purchase and 165 units from the March 25 purchase Problem 6-2AA Part 4 4. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places and final answers to nearest whole dollar.) Weighted Average Specific Identification FIFO LIFO Sales Less: Cost of goods sold Gross profit

Explanation / Answer

Solution 4:

Cost of goods available for sale = (145 * $80) + (445*$85) + (210*$90) + (290*$92)

= $95,005

Computation of Ending Inventory and COGS (FIFO) Particulars Amount Units in ending inventory 375 Units avaialbe in Stock belongs to:
290 units purchased on Mar 25 @ $92 per unit
85 units from purchased on Mar 18 @ $90 per unit Value of ending inventory (290*$92 + 85*$90) $34,330.00 Cost of goods available for sale $95,005.00 Cost of goods sold (Cost of goods availble for sale - Value of ending inventory) $60,675.00

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