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[The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system....

[The following information applies to the questions displayed below.]

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.

Date Activities Units Acquired at Cost Units Sold at Retail
Mar. 1 Beginning inventory 150 units @ $52.00 per unit
Mar. 5 Purchase 250 units @ $57.00 per unit
Mar. 9 Sales 310 units @ $87.00 per unit
Mar. 18 Purchase 110 units @ $62.00 per unit
Mar. 25 Purchase 200 units @ $64.00 per unit
Mar. 29 Sales 180 units @ $97.00 per unit
Totals 710 units 490 units

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 90 units from beginning inventory and 220 units from the March 5 purchase; the March 29 sale consisted of 70 units from the March 18 purchase and 110 units from the March 25 purchase.

Solutions

Expert Solution

Solution 3a:

Computation of ending inventory COGS under FIFO - Warnerwoods Co
Date Beginning Inventory Purchase Cost of Goods Sold Ending Inventory
Qty Rate Amount Qty Rate Amount Qty Rate Amount Qty Rate Amount
1-Mar 150 $52.00 $7,800.00 0 $0.00 $0.00 0 $0.00 $0.00 150 $52.00 $7,800.00
5-Mar 150 $52.00 $7,800.00 250 $57.00 $14,250.00 0 $0.00 $0.00 150 $52.00 $7,800.00
250 $57.00 $14,250.00
9-Mar 150 $52.00 $7,800.00 0 $0.00 $0.00 150 $52.00 $7,800.00 90 $57.00 $5,130.00
250 $57.00 $14,250.00 160 $57.00 $9,120.00
18-Mar 90 $57.00 $5,130.00 110 $62.00 $6,820.00 0 $0.00 $0.00 90 $57.00 $5,130.00
110 $62.00 $6,820.00
25-Mar 90 $57.00 $5,130.00 200 $64.00 $12,800.00 0 $0.00 $0.00 90 $57.00 $5,130.00
110 $62.00 $6,820.00 110 $62.00 $6,820.00
200 $64.00 $12,800.00
29-Mar 90 $57.00 $5,130.00 0 $0.00 $0.00 90 $57.00 $5,130.00 20 $62.00 $1,240.00
110 $62.00 $6,820.00 90 $62.00 $5,580.00 200 $64.00 $12,800.00
200 $64.00 $12,800.00
Total 490 $27,630.00 220 $14,040.00

Solution 3b:

Computation of ending inventory COGS under LIFO - Warnerwoods Co
Date Beginning Inventory Purchase Cost of Goods Sold Ending Inventory
Qty Rate Amount Qty Rate Amount Qty Rate Amount Qty Rate Amount
1-Mar 150 $52.00 $7,800.00 0 $0.00 $0.00 0 $0.00 $0.00 150 $52.00 $7,800.00
5-Mar 150 $52.00 $7,800.00 250 $57.00 $14,250.00 0 $0.00 $0.00 150 $52.00 $7,800.00
250 $57.00 $14,250.00
9-Mar 150 $52.00 $7,800.00 0 $0.00 $0.00 250 $57.00 $14,250.00 90 $52.00 $4,680.00
250 $57.00 $14,250.00 60 $52.00 $3,120.00
18-Mar 90 $52.00 $4,680.00 110 $62.00 $6,820.00 0 $0.00 $0.00 90 $52.00 $4,680.00
110 $62.00 $6,820.00
25-Mar 90 $52.00 $4,680.00 200 $64.00 $12,800.00 0 $0.00 $0.00 90 $52.00 $4,680.00
110 $62.00 $6,820.00 110 $62.00 $6,820.00
200 $64.00 $12,800.00
29-Mar 90 $52.00 $4,680.00 0 $0.00 $0.00 180 $64.00 $11,520.00 90 $52.00 $4,680.00
110 $62.00 $6,820.00 110 $62.00 $6,820.00
200 $64.00 $12,800.00 20 $64.00 $1,280.00
Total 490 $28,890.00 220 $12,780.00

Solution 3c:

Computation of ending inventory COGS under Weighted Average Cost - Warnerwoods Company
Date Beginning Inventory Purchase Cost of Goods Sold Ending Inventory
Qty Rate Amount Qty Rate Amount Qty Rate Amount Qty Rate Amount
1-Mar 150 $52.00 $7,800 0 $0.00 $0 0 $0.00 $0 150 $52.00 $7,800
5-Mar 150 $52.00 $7,800 250 $57.00 $14,250 0 $0.00 $0 400 $55.13 $22,050
9-Mar 400 $55.13 $22,050 0 $0.00 $0 310 $55.13 $17,089 90 $55.13 $4,961
18-Mar 90 $55.13 $4,961 110 $62.00 $6,820 0 $0.00 $0 200 $58.91 $11,781
25-Mar 200 $58.91 $11,781 200 $64.00 $12,800 0 $0.00 $0 400 $61.45 $24,581
29-Mar 400 $61.45 $24,581 0 $0.00 $0 180 $61.45 $11,062 220 $61.45 $13,520
Total 490 $28,150 220 $13,520



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