HW Problent 6.2 Aart Co. uses the perpetual inventory system and had the followi

Question

HW Problent 6.2 Aart Co. uses the perpetual inventory system and had the following transactions. Date Transaction Units Price 1/1 Beginning Inventory 180 x $14.40 4/19 Purchase 5/6 Sale 5/12 Purchase 270 x $16.20 324 $43.20 (retail price) 360 x $18.00 558 x $21.60 576 x $43.20 (retail price) 7/15 Purchase 10/16 Sale D) Compute the cost of goods sold and ending inventory values using: FIFO, L , wei and specific identification methods. For specific identification assume that the remaining inventory includes 400 units from the 7/15 purchase and 68 units from the 4/19 purchase. E) Calculate gross profit earned under each of the costing methods.

Explanation / Answer

Calculation of Ending Inventory: Average Cost Date Purchases Sales Balance Units PU Total Cost Units PU Total Cost Units PU Total Cost 01-Jan 180 14.40 2592 Average Cost 19-Apr 270 16.20 4374 450 15.48 6966 Opening Stock 2592 Add: Purchases 22906.8 06-May 324 15.48 5016 126 15.48 1950 Less: COGS 16,317 Closing Stock 9,182 12-May 360 18.00 6480 486 17.35 8430.48 Sales Value 15-Jul 558 21.6 12052.8 1044 19.62 20483.28 324*43.20 13996.8 576*43.20 24883.2 16-Oct 576 19.62 11,301 468 19.62 9,182 Total Sale Value 38880 Less: COGS 16,317 Gross Profit 22,563 Total 1368 25498.8 900 16,317 468 9,182 Calculation of Ending Inventory: FIFO Date Purchases Sales Balance Units PU Total Cost Units PU Total Cost Units PU Total Cost 01-Jan 180 14.40 2592 FIFO Opening Stock 2592 19-Apr 270 16.20 4374 180 14.4 2592 Add: Purchases 22906.8 270 16.2 4374 Less: COGS 15,390 Closing Stock 10,109 06-May 180 14.40 2592 126 16.20 2041 144 16.20 2333 Sales Value 324*43.20 13996.8 12-May 360 18.00 6480 126 16.2 2041.2 576*43.20 24883.2 360 18 6480 Total Sale Value 38880 Less: COGS 15,390 15-Jul 558 21.6 12052.8 126 16.2 2041.2 Gross Profit 23,490 360 18 6480 558 21.6 12052.8 16-Oct 126 16.20 2,041.20 468 21.60 10,109 360 18.00 6,480.00 90 21.60 1,944.00 Total 1368 25498.8 900 15,390 468 10,109 Calculation of Ending Inventory: LIFO Date Purchases Sales Balance Units PU Total Cost Units PU Total Cost Units PU Total Cost 01-Jan 180 14.40 2592 LIFO Opening Stock 2592 19-Apr 270 16.20 4374 180 14.4 2592 Add: Purchases 22906.8 270 16.2 4374 Less: COGS 17,528 Closing Stock 7,970 06-May 270 16.20 4374 126 14.40 1814 54 14.40 778 Sales Value 324*43.20 13996.8 12-May 360 18.00 6480 126 14.4 1814.4 576*43.20 24883.2 360 18 6480 Total Sale Value 38880 Less: COGS 17,528 15-Jul 558 21.6 12052.8 126 14.4 1814.4 Gross Profit 21,352 360 18 6480 558 21.6 12052.8 16-Oct 558 21.60 12,052.80 126 14.4 1814.4 18 18.00 324.00 342 18.00 6,156 Total 1368 25498.8 900 17,528 468 7,970 Calculation of Ending Inventory: Specific Identification Method Closing Units 468 Units from: Specific Units Rate Amount Opening Stock 2592 From 15.07 400 21.6 8640 Add: Purchases 22906.8 From 19.04 68 16.2 1101.6 Less: Ending Units Value 9,742 Closing Units Value 468 9741.6 COGS 15,757 Sales Value 324*43.20 13996.8 576*43.20 24883.2 Total Sale Value 38880 Less: COGS 15,757 Gross Profit 23,123

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

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