In: Accounting
Sam's Corner Store has the following purchase and sales information for one of their inventory items:
Date
Units $/Unit.
Total
Feb 1
Opening inventory
10
$8
$80
Feb 9
Purchase
25
$9
$225
Feb 15
Sale
15
$15
$225
Feb 17
Purchase
20
$11
$220
Feb 25
Sale
10
$16
$160
Required:
For (a) and (b) assume the company uses the periodic inventory system.
(a) Calculate the gross profit if the company uses first-in, first-out (FIFO)
(b) Calculate the value of the ending inventory if the company uses weighted average.
For (c) and (d) assume the company uses the perpetual inventory system.
(c) What is the cost of goods sold for the Feb 25 sale if the company uses weighted average to cost the inventory?
(d) What is the value of the ending inventory if the company uses FIFO?
Sales = 15 * $15.00 + 10 * $16.00
Sales = $385
Answer a.
Gross Profit = Sales - Cost of Goods Sold
Gross Profit = $385 - $215
Gross Profit = $170
Answer b.
Ending Inventory = $239
Answer c.
Cost of Goods Sold for Feb. 25 Sale is $99
Answer d.
Ending Inventory = $310