The beginning inventory for Dunne Co. and data on purchases and sales for a thre
ID: 2546590 • Letter: T
Question
The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown below
Date
Transaction
Number of Units
Per Unit
Total
The method of inventory costing based on the assumption that the costs of merchandise sold should be charged against revenue in the order in which the costs were incurred.
The method of inventory costing based on the assumption that the cost of merchandise sold is the cost of the most recent purchases.
The method of inventory costing in which a weighted average unit cost for each item is computed each time a purchase is made.
none
X
FIFO
1. Determine the inventory on June 30, 2016, and the cost of goods sold for the three-month period, using the first-in, first-out method
The method of inventory costing based on the assumption that the costs of merchandise sold should be charged against revenue in the order in which the costs were incurred.
and the periodic inventory system.
Points:
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none
X
LIFO
2. Determine the inventory on June 30, 2016, and the cost of goods sold for the three-month period, using the last-in, first-out method
The method of inventory costing based on the assumption that the cost of merchandise sold is the cost of the most recent purchases.
and the periodic inventory system.
Points:
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Check My Work
none
X
Weighted Average Cost Method
3. Determine the inventory on June 30, 2016, and the cost of goods sold for the three-month period, using the weighted average cost method
The method of inventory costing in which a weighted average unit cost for each item is computed each time a purchase is made.
and the periodic inventory system. Round the weighted average unit cost to the dollar.
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Final Question
4. Compare the gross profit and June 30, 2016, inventories using the following column headings:
Question not attempted.
1
FIFO
LIFO
Weighted Average
2
Sales
3
Cost of merchandise sold
4
Gross profit
5
6
Inventory, June 30, 2016
Solution
1
FIFO
LIFO
Weighted Average
2
Sales
3
Cost of merchandise sold
4
Gross profit
5
6
Inventory, June 30, 2016
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Date
Transaction
Number of Units
Per Unit
Total
Apr. 3 Inventory 25 $1,200 $30,000 8 Purchase 75 1,240 93,000 11 Sale 40 2,000 80,000 30 Sale 30 2,000 60,000 May 8 Purchase 60 1,260 75,600 10 Sale 50 2,000 100,000 19 Sale 20 2,000 40,000 28 Purchase 80 1,260 100,800 June 5 Sale 40 2,250 90,000 16 Sale 25 2,250 56,250 21 Purchase 35 1,264 44,240 28 Sale 44 2,250 99,000Explanation / Answer
Periodic inventory system:
Units available for sale:
April 3 25 units * $1200 = $30000
8 75 units * $1240 = $93000
May 8 60 units * $1260 = $75600
28 80 units * $1260 = $100800
June 21 35 units * $1264 = $44240
275 units $343640
FIFO:
Cost of goods sold:
April 11 25 units * $1200 $30000
15 units * $1240 $18600
30 30 units * $1240 $37200
May 10 30 units * $1240 $37200
20 units * $1260 $25200
19 20 units * $1260 $25200
June 5 20 units * $1260 $25200
20 units * $1260 $25200
16 25 units * $1260 $31500
28 35 units * $1260 $44100
9 units * $1264 $11376
$310776
Ending inventory:
26 units * $1264 = $32864.
LIFO:
Cost of goods sold:
April 11 40 units * $1240 = $49600
30 30 units * $1240 = $37200
May 10 50 units * $1260 = $63000
19 10 units * $1260 = $12600
5 units * $1240 = $6200
5 units * $1200 = $6000
June 5 40 units * $1260 = $50400
16 25 units * $1260 = $31500
28 35 units * $1264 = $44240
9 units * $1260 = $11340
$312080
Ending inventory:
April 3 20 units * $1200 = $24000
May 28 6 units * $1260 = $7560
$31560
Weighted average method:
Weighted average per unit = $343640 / 275 units
= $1249.6
Cost of goods sold :
249 units * $1249.6 = $311150.4
Ending inventory:
26 units * $1249.6 = $32489.6
FIFO LIFO WEIGHTED AVERAGE METHOD Sales $525250 $525250 $525250 Cost of goods sold $310776 $312080 $311150.4 Gross profit $214474 $213170 $214099.6 Ending inventory $32864 $31560 $32489.6.Related Questions
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