all the requirements Mcrchar Problems Group A For all problems, assume the perpe

Question

all the requirements

Mcrchar Problems Group A For all problems, assume the perpetual inventory system is used unless stated othenvise. P6-28A Accounting for inventory using the perpetual inventory system- FIFO, LIFO, and weighted-average Fit Gym began January with merchandise inventory of 78 crates of vitamins that cost a total of $4,290. During the month, Fit Gym purchased and sold merchandise on account as follows: Learning 2.Ending M Jan. 5 Purchase 13 Sale 18 Purchase 26 Sale 156 crates $ 64 each 180 crates $ 100 each 114 crates 75 each 150 crates 116 each Requirements 1. Prepare a perpetual inventory record, using the FIFO inventory costing method, and determine the company's cost of goods sold, ending merchandise inventory, and gross protit. Prepare a perpetual inventory record, using the LIFO inventory costing method, and determine the company's cost of goods sold, ending merchandise inventory, and gross profit. 2. 3. Prepare a perpetual inventory record, using the weighted-average inventory cost- ing method, and determine the company's cost of goods sold, ending merchandise inventory, and gross profit. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.) 4. If the business wanted to pay the least amount of income taxes possible, which method would it choose?

Explanation / Answer

1. FIFO (perpetual)

Cost of goods sold = $21474

Cost of ending inventory = $1350

Gross profit = Sales - Cost of goods sold

= $35400 - $21474

= $13926

2.

LIFO (perpetual)

Cost of goods sold = $21834

Cost of ending inventory = $990

Gross profit = Sales - Cost of goods sold

= $35400 - $21834

= $13566

3. Weighted average (Perpetual)

Cost of goods sold = $21555

Cost of ending inventory = $1269

Gross profit = Sales - Cost of goods sold

= $35400 - $21555

= $13845

4. LIFO.

Date Purchases Cost of goods sold Inventory Qty Rate Amt Qty Rate Amt Qty Rate Amt Jan 1 78 $55 $4290 Jan 5 156 $64 $9984 78 $55 $4290 156 $64 $9984 Jan 13 78 $55 $4290 102 $64 $6528 54 $64 $3456 Jan 18 114 $75 $8550 54 $64 $3456 114 $75 $8550 Jan 26 54 $64 $3456 96 $75 $7200 18 $75 $1350 $21474 $1350

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.