tive 7 ix 6A E6 A-26 Comparing ending merchandise inventory, cost of goo gross p
ID: 2553917 • Letter: T
Question
tive 7 ix 6A E6 A-26 Comparing ending merchandise inventory, cost of goo gross profit using the periodic inventory system-FIFO, T weighted-average methods LIFO, and 55513 Assume that Jump Coffée Shop completed the followingperidie inventory transacin for a line of merchandise inventory Beginning merchandise inventory 17 units@$15 each 5 units @$ 19 each 14 units@ $ 37 each 11 units @ $ 23 each 13 units @ $ 37 each Jun. 1 12 Purchase 20 Sale 24 Purchase 29 Sale Requirements 1. Compute ending merchandise inventory, cost of goods sold, and gross profit using 2. Compute ending merchandise inventory, cost of goods sold, and gross profi usirg 3. Compute ending merchandise inventory, cost of goods sold, and gross profi usig the FIFO inventory costing method. the LIFO inventory costing method. the weighted-average inventory costing method. (Round weighted-averageco unit to the nearest cent and all other amounts to the nearest dollar.)Explanation / Answer
Answer: Periodic Inventory record Units Cost per Unit Cost 1-Jun Beginning Inventory 17 15.00 255.00 Add: 12-Jun Purchases 5 19.00 95.00 24-Jun Purchases 11 23.00 253.00 Total units available for Sale 33 603 20-Jun Sale 14 29-Jun Sale 13 Total units sold 27 Ending Inventory 6 1 FIFO method Under FIFO method goods bought first are sold first. Therefore ending inventory of 6 units would include units purchased on 29 June. Particulars Units Unit price Total cost 29-Jun 6 $ 23 $ 138 (6*$23) Total ending inventory 6 $ 138 Cost of goods sold = Cost of goods available for Sale-Ending inventory 603-138 $ 465 Gross profit Sales 999 (14*37+13*37) Less: Cost of goods sold $ 465 Gross profit $ 534 2 LIFO method Under LIFO method goods bought last are sold first. Therefore ending inventory of 6 units would include units from beginning inventory. Particulars Units Unit price Total cost 1-Jun 6 15 90 (6*15) Total ending inventory 6 $ 90 Cost of goods sold = Total inventory-Ending inventory 603-90 $ 513 Gross profit Sales 999 (14*37+13*37) Less: Cost of goods sold $ 513 Gross profit $ 486 3 Weighted-average method Weighted average cost is calculated as follows: Weighted average cost Total cost/Total units =603/33 $ 18.27 Value of ending inventory Number of units in ending inventory*Weighted average cost =6*$18.27 $ 109.64 Cost of goods sold = Total inventory-Ending inventory 603-109.64 $ 493 Gross profit Sales 999 (14*37+13*37) Less: Cost of goods sold $ 493 Gross profit $ 506
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.