Question

In: Accounting

Sam's Corner Store has the following purchase and sales information for one of their inventory items:...

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

$80

Feb 9

Purchase

$225

Feb 15

Sale

$15

$225

Feb 17

Purchase

$11

$220

Feb 25

Sale

$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.

(d) What is the value of the ending inventory if the company uses FIFO?

Solutions

Expert Solution

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

ekkarill92 answered 1 year ago

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