Question

The cost of the fine European mixers is expected to increase. Natalie has just negotiated new terms with the owner of Kzinski Supply Company, which will include shipping costs in the negotiated purchase price (mixers will be shipped free on board (FOB) destination). Assume that Natalie has decided to use a periodic inventory system and now must choose a cost flow assumption for her mixer inventory. The transactions listed below occur in February to May 2020.

Feb. 2: Natalie buys two deluxe mixers on account from Mixer Supply Company for $1,200 ($600 each), FOB destination, terms n/30.

Feb. 16: She sells one deluxe mixer for $1,150 cash.

Feb. 25: She pays the amount owed to Mixer Supply Company.

Mar. 2: She buys one deluxe mixer on account from Mixer Supply Company for $618, FOB destination, terms n/30.

Mar. 30 : Natalie sells two deluxe mixers for a total of $2,300 cash. Mar. 31: She pays the amount owed to Kzinski Supply Company.

Apr. 1 : She buys two deluxe mixers on account from Mixer Supply Company for $1,224 ($612 each), FOB destination, terms n/30.

Apr. 13: She sells three deluxe mixers for a total of $3,450 cash.

Apr. 30: Natalie pays the amount owed to Mixer Supply Company.

May 4: She buys three deluxe mixers on account from Mixer Supply Company for $1,875 ($625 each), FOB destination, terms n/30.

May 27: She sells one deluxe mixer for $1,150 cash.

For Part II, determine the cost of goods available for sale. You will recall from Chapter 5 (see Part I above) that at the end of January, Cookie Creations had three mixers on hand at a cost of $575 each. For Part II of the assignment, you will calculate the following items: ·

ending inventory,

cost of goods sold,

gross profit,

and gross profit rate under each of the following methods: last-in,

first-out (LIFO);

first-in, first-out (FIFO);

and average cost.

(If anyone can help me with part II that will be great)

Answer 1