4. You extracted the following info from WAN Co. regarding its inventory transac

Question

4. You extracted the following info from WAN Co. regarding its inventory transactions for last three months. The Co. uses perpetual inventory system. Date Transactions # of Units Per Unit Total Oct 1 Inventory 2,500 $60.00 $150,000 Oct 10 Purchase 7,500 $68.00 $510,000 Oct 28 Sale 3,750 $120.00 $450,000 Oct 30 Sale 1,250 $120.00 $150,000 Nov 5 Sale 500 $120.00 $60,000 Nov10 Purchase 18,000 $70.00 $1,260,000 Nov16 Sale 9,000 $125.00 $1,125,000 Nov28 Sale 8,500 $125.00 $1,062,500 Dec 5 Purchase 15,000 $71.60 $1,074,000 Dec 14 Sale 10,000 $125.00 $1,250,000 Dec 25 Purchase 2,500 $72.00 $180,000 Dec 30 Sale 8,750 $125.00 $1,093,750 a. Record the inventory, purchases, and COGS data – using LIFO method. Follow Exhibit 5 in the book. 10 points b. Determine the total sales, total COGS, and gross profit for the period. 10 points c. Determine the ending inventory s of December 31.

Explanation / Answer

STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL LIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ 1-Oct 2500 60 150000 10-Oct 7500 68 510000 2500 60 150000 7500 68 510000 28-Oct 3750 68 255000 2500 60 150000 3750 68 255000 30-Oct 1250 68 85000 2500 60 150000 2500 68 170000 5-Nov 500 68 34000 2500 60 150000 2000 68 136000 10-Nov 18000 70 1260000 2500 60 150000 2000 68 136000 18000 70 1260000 16-Nov 9000 70 630000 2500 60 150000 2000 68 136000 9000 70 630000 28-Nov 8500 70 595000 2500 60 150000 2000 68 136000 500 70 35000 5-Dec 15000 71.6 1074000 2500 60 150000 2000 68 136000 500 70 35000 15000 71.6 1074000 14-Dec 10000 71.6 716000 2500 60 150000 2000 68 136000 500 70 35000 5000 71.6 358000 25-Dec 2500 72 180000 2500 60 150000 2000 68 136000 500 70 35000 5000 71.6 358000 2500 72 180000 30-Dec 2500 72 180000 5000 71.6 358000 500 70 35000 2500 60 150000 750 68 51000 1250 68 85000 TOTAL 43000 3024000 41750 2939000 3750 235000 Total sales: 28-Oct 450000 30-Oct 150000 5-Nov 60000 16-Nov 1125000 28-Nov 1062500 14-Dec 1250000 30-Dec 1093750 Ttotal sales 5191250 COGS:   $2939,000 Gross profit: Ssales -COGS = $ 5191,250 -2939,000 = $2252,250 Ending Inventory: $235,000

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