In: Accounting
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 | 180 | units | @ $52.60 per unit | |||||||
Mar. | 5 | Purchase | 265 | units | @ $57.60 per unit | |||||||
Mar. | 9 | Sales | 340 | units | @ $87.60 per unit | |||||||
Mar. | 18 | Purchase | 125 | units | @ $62.60 per unit | |||||||
Mar. | 25 | Purchase | 230 | units | @ $64.60 per unit | |||||||
Mar. | 29 | Sales | 210 | units | @ $97.60 per unit | |||||||
Totals | 800 | units | 550 | units | ||||||||
1. Compute cost of goods available for sale and the number of units available for sale.
2. Compute the number of units in ending inventory.
3.Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 105 units from beginning inventory and 235 units from the March 5 purchase; the March 29 sale consisted of 85 units from the March 18 purchase and 125 units from the March 25 purchase. (Round weighted average cost per unit to 2 decimal places.)
4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 105 units from beginning inventory and 235 units from the March 5 purchase; the March 29 sale consisted of 85 units from the March 18 purchase and 125 units from the March 25 purchase. (Round weighted average cost per unit to two decimals.)
Req1: Cost of goods available for sale is as follows:
Beginning inventory (180 units @52.60):$ 9468
Purchase on Mar5 (265 [email protected]): $15,264
Purchase on Mar 18 (125 [email protected]): $7825
Purchase on Mar 25 (230 [email protected]): $14858
Total cost of goods avialable for sale: $ 47,415
Req2: Number of units of Ending Inventory
Total units available for sale (180+265+125+230) : 800 units
Less: Units sold 550 units
Units of Ending Inventory: 250 units
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD | |||||||||
RECIEPTS | COST OF GOODS SOLD | BALANCE | |||||||
DATE | UNITS | RATE | AMOUNT $ | UNITS | RATE | AMOUNT $ | UNITS | RATE | AMOUNT $ |
1-Mar | 180 | 52.6 | 9468 | ||||||
5-Mar | 265 | 57.6 | 15264 | 180 | 52.6 | 9468 | |||
265 | 57.6 | 15264 | |||||||
9-Mar | 180 | 52.6 | 9468 | ||||||
160 | 57.6 | 9216 | 105 | 57.6 | 6048 | ||||
18-Mar | 125 | 62.6 | 7825 | 105 | 57.6 | 6048 | |||
125 | 62.6 | 7825 | |||||||
25-Mar | 230 | 64.6 | 14858 | 105 | 57.6 | 6048 | |||
125 | 62.6 | 7825 | |||||||
230 | 64.6 | 14858 | |||||||
29-Mar | 105 | 57.6 | 6048 | 20 | 62.6 | 1252 | |||
105 | 62.6 | 6573 | 230 | 64.6 | 14858 | ||||
TOTAL | 620 | 37947 | 550 | 31305 | 250 | 16110 | |||
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL LIFO METHOD | |||||||||
RECIEPTS | COST OF GOODS SOLD | BALANCE | |||||||
DATE | UNITS | RATE | AMOUNT $ | UNITS | RATE | AMOUNT $ | UNITS | RATE | AMOUNT $ |
1-Mar | 180 | 52.6 | 9468 | ||||||
5-Mar | 265 | 57.6 | 15264 | 180 | 52.6 | 9468 | |||
265 | 57.6 | 15264 | |||||||
9-Mar | 265 | 57.6 | 15264 | ||||||
75 | 52.6 | 3945 | 105 | 52.6 | 5523 | ||||
18-Mar | 125 | 62.6 | 7825 | 105 | 52.6 | 5523 | |||
125 | 62.6 | 7825 | |||||||
25-Mar | 230 | 64.6 | 14858 | 105 | 52.6 | 5523 | |||
125 | 62.6 | 7825 | |||||||
230 | 64.6 | 14858 | |||||||
29-Mar | 210 | 64.6 | 13566 | 105 | 52.6 | 5523 | |||
125 | 62.6 | 7825 | |||||||
20 | 64.6 | 1292 | |||||||
TOTAL | 620 | 37947 | 550 | 32775 | 250 | 14640 | |||
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL WEIGHTED AVERAGE METHOD | |||||||||
RECIEPTS | COST OF GOODS SOLD | BALANCE | |||||||
DATE | UNITS | RATE | AMOUNT $ | UNITS | RATE | AMOUNT $ | UNITS | RATE | AMOUNT $ |
1-Mar | 180 | 52.6 | 9468 | ||||||
5-Mar | 265 | 57.6 | 15264 | 180 | 52.6 | 9468 | |||
265 | 57.6 | 15264 | |||||||
AVERAGE | 445 | 55.58 | 24732 | ||||||
9-Mar | 340 | 55.58 | 18897 | 105 | 55.58 | 5835 | |||
18-Mar | 125 | 62.6 | 7825 | 105 | 55.58 | 5835 | |||
125 | 62.6 | 7825 | |||||||
25-Mar | 230 | 64.6 | 14858 | 105 | 55.58 | 5835 | |||
125 | 62.6 | 7825 | |||||||
230 | 64.6 | 14858 | |||||||
AVERAGE | 460 | 62 | 28518 | ||||||
29-Mar | 210 | 62 | 13020 | 250 | 62 | 15498 | |||
TOTAL | 620 | 37947 | 550 | 31917 | 250 | 62 | 15498 | ||
Req 3 | FIFO | LIFO | WEIGHTED | ||||||
Ending Inventory | 16110 | 14640 | 15498 | ||||||
Cost of Goods sold | 31305 | 32775 | 31917 | ||||||
Req 4 | FIFO | LIFO | WEIGHTED | ||||||
Sales (340 [email protected]+210 [email protected]) | 50280 | 50280 | 50280 | ||||||
Less: Cost of goods sold | 31305 | 32775 | 31917 | ||||||
Gross margin | 18975 | 17505 | 18363 |