Assume that RB Tire Store completed the following perpetual inventory transactio

Question

Assume that RB Tire Store completed the following perpetual inventory transactions for a line of tires (Click the icon lo vew ee transactions ) Read the requirements. Requirement 2, Compute cost of goods sold and gross profit using the LIFO inventory costing method. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the LIFO inventory costing n entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased method Enter the transactions in chronoiogical order, calaulating new inventory on hanid balances after each transaction Once all of the transact t sold and on hand at the end of the period (Enter the oldest inventary layers first) Cost of Goods Sold Inventory on Hand Unit Total Cost More Info Unit Total Unit Total Date Quantity Cost Cost QuantityCost ost Quantity Cost Dec. 1 Dec 1 Begirnng merchandise inventory 11 Purchase 23 Sale 26 Purchase 29 Sae 22 tires $ 53 each 14 tires $ 71each 13 tres @ s 8 each 10 tres s 74 each 19 res @ S 84 each Pint Totals Compute gross profit using the LIFO inventory costing method Grass profit is S [usng the LIFO inventory costing method Enter any number in the edit hel's and then continue to the next question

Explanation / Answer

ANSWER = CALCUALTION OF COST OF GOODS SOLD AND INVENTORY VALYE BY USING LIFO METHOD Purchases Cost of Goods Sold Inventory on hand Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Dec-01 22 $53 $1,166 Dec-11 14 $71 $994 22 $53 $1,166 14 $71 $994 Dec-23 14 $71 $994 4 $53 $212 18 $53 $954 Dec-26 10 $74 $740 18 $53 $954 10 $74 $740 Dec-29 10 $74 $740 9 $53 $477 9 $53 $477 TOTAL $24 $1,734 $37 $2,423 9 53 477 ANSWER = CALCUALTION OF COST OF GOODS SOLD AND INVENTORY VALYE BY USING WEIGHTED AVERAGE COST Purchases Cost of Goods Sold Inventory on hand Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Dec-01 22 $53 $1,166 Dec-11 14 $71 $994 36 $60 $2,160 Dec-23 18 $60 $1,080 18 $60 $1,080 Dec-26 10 $74 $740 28 $65 $1,820 Dec-29 19 $65 $1,235 9 $65 $585 TOTAL $24 $1,734 $37 $2,315 9 65 585 CLCULATION OF GROSS PROFIT LIFO Wighted Sales = 18 liters @ 84 1512 1512 19 liters @ 84 1596 1596 TOTAL 3108 3108 Less: Cost of goods sold $2,423 $2,315 Gross Profit $685 $793 Answer = Weighted avg cost will produce greater profit

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