Question

Montoure Company uses a periodic inventory system. It entered into the following calendar-year purchases and sales transactions.
  

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Jan.

1

Beginning inventory

700

units

@ $40.00 per unit

Feb.

10

Purchase

450

units

@ $37.00 per unit

Mar.

13

Purchase

250

units

@ $22.00 per unit

Mar.

15

Sales

850

units

@ $70.00 per unit

Aug.

21

Purchase

200

units

@ $45.00 per unit

Sept.

5

Purchase

600

units

@ $41.00 per unit

Sept.

10

Sales

800

units

@ $70.00 per unit

Totals

2,200

units

1,650

units

  
Required:
1. Compute cost of goods available for sale and the number of units available for sale.
         

Cost of goods available for sale                

Number of units available for sale              units

  
2. Compute the number of units in ending inventory.

	Ending inventory units

  
3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification units sold consist of 700 units from beginning inventory, 250 from the February 10 purchase, 250 from the March 13 purchase, 100 from the August 21 purchase, and 350 from the September 5 purchase. (Round your average cost per unit to 2 decimal places. Round your final answers to the nearest whole dollar amount.)

            Ending Inventory

(a)      FIFO  

(b)      LIFO  

(c)       Weighted average

(d)      Specific identification      

4. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places. Round your final answers to the nearest whole dollar amount.)
  

	FIFO LIFO Weighted Average Specific Identification Sales Less: Cost of goods sold Gross profit $0 $0 $0 $0

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC FIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	700	40	28000	700	40	28000
Purchasse
10-Feb	450	37	16650	450	37	16650
13-Mar	250	22	5500	250	22	5500
21-Aug	200	45	9000	200	45	9000
5-Sep	600	41	24600	50	41	2050	550	41	22550
TOTAL	2200		83750	1650		61200	550		22550
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC LIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	700	40	28000	150	40	6000	550	40	22000
Purchasse
10-Feb	450	37	16650	450	37	16650
13-Mar	250	22	5500	250	22	5500
21-Aug	200	45	9000	200	45	9000
5-Sep	600	41	24600	600	41	24600
TOTAL	2200		83750	1650		61750	550		22000
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC WEIGHTED AVERAGE METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	700	40	28000
Purchasse
10-Feb	450	37	16650
13-Mar	250	22	5500
21-Aug	200	45	9000
5-Sep	600	41	24600
TOTAL	2200	38.07	83750	1650	38.07	62816	550	38.07	20934
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC SPECIFIC IDENTIFICATION METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	700	40	28000	700	40	28000
Purchasse
10-Feb	450	37	16650	250	37	9250	200	37	7400
13-Mar	250	22	5500	250	22	5500
21-Aug	200	45	9000	100	45	4500	100	45	4500
5-Sep	600	41	24600	350	41	14350	250	41	10250
TOTAL	2200		83750	1650		61600	550		22150
Req 1.0
Cost of goods available for sale and units available
	RECIEPTS
DATE	UNITS	RATE	AMOUNT $
1-Jan	700	40	28000
Purchasse
10-Feb	450	37	16650
13-Mar	250	22	5500
21-Aug	200	45	9000
5-Sep	600	41	24600
TOTAL	2200		83750
Req 2.
Ending inventory units: 550 units
Req 3.
		Ending inventory
FIFO		22550
LIFO		22000
Average		20934
Specific Identification		22150
Req 4.
Gross Profit
			FIFO	LIFO	Average	Specific
Sales revennue			115500	115500	115500	115500
Less: Cost of goods soldd			61200	61750	62816	61600
Gross Margin			54300	53750	52684	53900