a2) Prepare partial income statements through gross profit, under each of the fo
ID: 2567113 • Letter: A
Question
a2)
Prepare partial income statements through gross profit, under each of the following cost flow assumptions. (Round answers to 2 decimal places, e.g. 125.25.) (1) Specific identification method assuming:
(i) The March 5 sale consisted of 1,000 liters from the March 1 beginning inventory and 1,230 liters from the March 3 3 purchase; and
(ii) The March 30 sale consisted of the following number of units sold from beginning inventory and each purchase: 490 liters from March 1; 510 liters from March 3; 2,845 liters from March 10; 1,265 liters from March 20.
(2) FIFO
(3) LIFO
PLEASE DOUBLE CHECK WORK
You are provided with the following information for Barton Inc. Barton Inc. uses the periodic method of accounting for its inventory transactions. March 1 Beginning inventory 1,940 liters at a cost of 61¢ per liter. March 3 Purchased 2,515 liters at a cost of 66¢ per liter. March 5 Sold 2,230 liters for $1.10 per liter March 10 Purchased 3,935 liters at a cost of 74¢ per liter March 20 Purchased 2,460 liters at a cost of 82¢ per liter. March 30 Sold 5,110 liters for $1.36 per liter. (al) Calculate the value of ending inventory that would be reported on the balance sheet, under each of the following cost flow methods. (Round answers to O decimal places, e.g. 1250. (1) Specific identification method assuming: (i) The March 5 sale consisted of 1,000 liters from the March 1 beginning inventory and 1,230 liters from the March 3 purchase; and (ii) The March 30 sale consisted of the following number of units sold from beginning inventory and each purchase: 490 liters from March 1; 510 liters from March 3 2,845 liters from March 10; and 1,265 liters from March 20. (2) FIFO (3) LIFO Ending inventory Specific identification FIFO LIFOExplanation / Answer
Answer
Sales
Units
Rate
Amount $
Mar-05
2230
1.1
2453
Mar-30
5110
1.36
6950
0
Total
7340
9403
-----SPECIFIC IDENTIFICATION
Specific Identification
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
1940
0.61
1183
1490
0.61
909
450
0
275
Purchases:
Mar-03
2515
0.66
1660
1740
0.66
1148
775
0
512
Mar-10
3935
0.74
2912
2845
0.74
2105
1090
0
807
Mar-20
2460
0.82
2017
1265
0.82
1037
1195
0
980
TOTAL
10850
7772
7340
5200
3510
2573
Sales revenue
9403
Less : Expenses
Cost of Goods Sold (as calculated above)
5200
Gross Profit
4203
-----FIFO
FIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
1940
0.61
1183
1940
0.61
1183
0
0
0
Purchases:
Mar-03
2515
0.66
1660
2515
0.66
1660
0
0
0
Mar-10
3935
0.74
2912
2885
0.74
2135
1050
0
777
Mar-20
2460
0.82
2017
0
2460
0.82
2017
TOTAL
10850
7772
7340
4978
3510
2794
Sales revenue
9403
Less : Expenses
Cost of Goods Sold (as calculated above)
4978
Gross Profit
4425
----LIFO Method
LIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
1940
0.61
1183
0.61
0
1940
0
1183
Purchases:
Mar-03
2515
0.66
1660
945
0.66
624
1570
0
1036
Mar-10
3935
0.74
2912
3935
0.74
2912
0
0
0
Mar-20
2460
0.82
2017
2460
0
0
0.82
2017
TOTAL
10850
7772
7340
3536
3510
4237
Sales revenue
9403
Less : Expenses
Cost of Goods Sold (as calculated above)
3536
Gross Profit
5867
Sales
Units
Rate
Amount $
Mar-05
2230
1.1
2453
Mar-30
5110
1.36
6950
0
Total
7340
9403
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