In: Accounting
[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.
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 |