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In: Accounting

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

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

Required:
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.

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 and final answers to nearest whole dollar.)

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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