Question

Exercise 8-10 Inventory information for Part 311 of Grouper Corp. discloses the following information for the month of June. June 1 Balance 298 units @ $11 June 10 Sold 200 units @ $26 11 Purchased 802 units @ $13 15 Sold 497 units @ $27 20 Purchased 497 units @ $14 27 Sold 300 units @ $29

Assuming that the periodic inventory method is used, compute the cost of goods sold and ending inventory under (1) LIFO and (2) FIFO. (1) LIFO (2) FIFO Cost of Goods Sold $ $ Ending Inventory $ $ LINK TO TEXT

Assuming that the perpetual inventory method is used and costs are computed at the time of each withdrawal, what is the value of the ending inventory at LIFO? The ending inventory at LIFO $ LINK TO TEXT

Assuming that the perpetual inventory method is used and costs are computed at the time of each withdrawal, what is the gross profit if the inventory is valued at FIFO? Gross Profit (FIFO) $

Answer 1

Correct Answer:

Requirement: 1

Periodic	FIFO	LIFO
Cost of Goods Sold	$     12,365	$      13,458
Cost of Ending Inventory	$       8,297	$        7,204

Requirement 2:

Perpetual	LIFO
Cost of Ending Inventory	$        7,801

Requirement 3:

	FIFO
Gross Margin	$        14,954

Working:

Cost of Goods Available for sale
	Units	Cost per unit	value
Beginning Inventory	298	$        11.00	$           3,278
Purchases	802	$        13.00	$         10,426
Purchases	497	$        14.00	$           6,958
Total	1597		$         20,662

	FIFO
A	Total Units Available for sale			1597			$              20,662
	Units Sold			997
	Ending Inventory Units			600
	Valuation
	Cost of Goods Sold		298		$           11.00		$                3,278
			699		$           13.00		$                9,087
B	Cost of Goods Sold		997	units			$              12,365
A-B	Ending Inventory		600	units			$                8,297

Periodic LIFO
A	Total Units Available for sale			1597			$              20,662
	Units Sold			997
	Ending Inventory Units			600
	Valuation
	Cost of Goods Sold		497		$           14.00		$                6,958
			500		$           13.00		$                6,500
B	Cost of Goods Sold		997	units			13458
A-B	Ending Inventory		600	units			$                7,204

Perpetual LIFO
A	Total Units Available for sale			1597			$              20,662
	Units Sold			997
	Ending Inventory Units			600
	Valuation
	Cost of Goods Sold		200		$           11.00		$                2,200
			497		$           13.00		$                6,461
			300		$           14.00		$                4,200
B	Cost of Goods Sold		997	units			12861
A-B	Ending Inventory		600	units			$                7,801

		FIFO
A	Sales Revenue	$        27,319
B	Cost of goods sold	$        12,365
C =A-B	Gross Margin	$        14,954

Sales Revenue
	units sold	Selling price per unit	Total amount
10-June	200	$                 26	$              5,200
15-June	497	$                 27	$            13,419
27-June	300	$                 29	$              8,700
Total sales	997		$            27,319

                                                                                                                      

End of Answer.

Thanks