Scrappers Supplies tracks the number of units purchased and sold throughout each

Question

Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system Assume its accounting records provided the following information at the end of the annual accounting period, December 31 Transactions Units Unit Cost 160 $30 Beginning inventory, January 1 Transactions during the year: a. Purchase on account, March 2 b. Cash sale, April 1 ($46 each) c. Purchase on account, June 30 d. Cash sale, August 1 ($46 each) 280 32 (310) 210 36 (60) TIP: Although the purchases and sales are listed in chronological order, Scrappers determines the cost of goods sold after all of the purchases have occurred Required 1. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round "Cost per Unit" to 2 decimal places.) a. Last-in, first-out. LIFO (Periodic) Cost per Unit Units Total Beginning Inventory Purchases March 2 June 30 Total Purchases Goods Available for Sale Cost of Goods Sold Units from Beginning Inventory Units from March 2 Purchase Units from June 30 Purchase Total Cost of Goods Sold Ending Inventory

Explanation / Answer

Req 1a: LIFO -Periodic UNITS CPU TOTAL Beginning Inventory 160 30 4800 Purchases 2-Mar 280 32 8960 30-Jun 210 36 7560 Total Purchases 490 16520 Goods available for sale 650 21320 Cost of Goods sold Units from beg. Inventory 0 30 0 Units from Mar2 purch. 160 32 5120 Units from June30 purch. 210 36 7560 Total cost of Goods sold 12680 Ending Inventory 8640 Req 2 Weighted Average UNITS CPU TOTAL Beginning Inventory 160 30 4800 Purchases 2-Mar 280 32 8960 30-Jun 210 36 7560 Total Purchases 490 16520 Goods available for sale 650 32.8 21320 Cost of Goods sold 370 32.8 12136 Ending Inventory 9184 Req 3: FIFO-Periodic UNITS CPU TOTAL Beginning Inventory 160 30 4800 Purchases 2-Mar 280 32 8960 30-Jun 210 36 7560 Total Purchases 490 16520 Goods available for sale 650 21320 Cost of Goods sold Units from beg. Inventory 160 30 4800 Units from Mar2 purch. 210 32 6720 Units from June30 purch. 0 36 0 Total cost of Goods sold 11520 Ending Inventory 9800 Req 4: Specific Identification UNITS CPU TOTAL Beginning Inventory 160 30 4800 Purchases 2-Mar 280 32 8960 30-Jun 210 36 7560 Total Purchases 490 16520 Goods available for sale 650 21320 Cost of Goods sold Units from beg. Inventory 62 30 1860 Units from Mar2 purch. 248 32 7936 Units from June30 purch. 60 36 2160 Total cost of Goods sold 11956 Ending Inventory 9364 Req 5: FIFO Gives highest gross profit Req 6 LIFO Lowest income tax

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