Question

BobCat purchases and resells plush toys. The toys sell for $20 per unit. Purchase prices of the toys fluctuates. Information relating to inventory purchases and sales is below. In the next questions, you will be asked to calculate COGS, EI and Gross Margin using a periodic system with average, LIFO and FIFO cost flow assumptions and using a perpetual system with FIFO, and LIFO cost flow assumptions.

Periodic weighted average COGS, Gross Margin and Ending Inventories,FIFO Periodic COGS and Ending Inventories,LIFO Perpetual COGS and Ending Inventories,FIFO Perpetual Gross profit and ending inventories,LIFO Periodic COGS and Ending Inventories are:

Please, round weighed average cost per item to two decimal points (e.g. 10.56)

Date	Purchases	Sold	Balance
3/1			1,000 units @ $3.90
3/5	3,000 units @ $4.00		4,000 units
3/15		2,000 @ $20.00	2,000 units
3/20	4,000 units @ $4.20		6,000 units
3/23		3,000 @ $20.00	3,000 units
3/30	1,000 units @ $4.50		5,000 units

Answer 1

1]	CALCULATION OF GOODS AVAILABLE FOR SALE:
	Date	Particulars	Units	Cost per unit	Total Cost
	01-Mar	Beginning inventory	1000	$                 3.90	$        3,900.00
	05-Mar	Purchases	3000	$                 4.00	$      12,000.00
	20-Mar	Purchases	4000	$                 4.20	$      16,800.00
	30-Mar	Purchases	1000	$                 4.50	$        4,500.00
	Units/Cost of goods available for sale	9000		$      37,200.00
2]	Total units sold = 2000+3000 =	5000
	Ending inventory in units = 9000-5000 =	4000
	Weighted average [periodic] cost = 37200/9000 =		$ 4.13
3]	Sales revenue = 5000*20 =			$        1,00,000
4]	PERIODIC SYSTEM:
		Calculation for COGS	COGS	Ending Inventory	Gross Profit
	LIF0	= 1000*4.5+4000*4.2 =	$          21,300	$            15,900	$            78,700
	FIFO	=1000*3.9+3000*4+1000*4.2 =	$          20,100	$            17,100	$            79,900
	Wt. Avg.	=5000*4.13 =	$          20,650	$            16,550	$            79,350
	PERPETUAL SYSTEM:
	LIFO	=2000*4+3000*4.2 =	$          20,600	$            16,600	$            79,400
	FIFO	=1000*3.9+1000*4+2000*4+1000*4.2 =	$          20,100	$            17,100	$            79,900