Question

Greg’s Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. Greg's Bicycle Shop uses a periodic inventory system.

Date			Transactions	Units				Unit Cost				Total Cost
March	1		Beginning inventory		20			$	225				$	4,500
March	5		Sale ($350 each)		15
March	9		Purchase		10				245					2,450
March	17		Sale ($400 each)		8
March	22		Purchase		10				255					2,550
March	27		Sale ($425 each)		12
March	30		Purchase		7				275					1,925
													$	11,425

  5. Calculate sales revenue and gross profit under each of the four methods. (Round weighted-average cost amounts to 2 decimal places.)
  

	specific identification	FIFO	LIFO	Weighted Average Cost
Sales Revenue
Gross Profit

Answer 1

			FIFO	LIFO	WA
	Sales Revenue
	15 units @ $ 350		$   5,250.00	$   5,250.00	$   5,250.00
	8 units @ $ 400		$   3,200.00	$   3,200.00	$   3,200.00
	12 units @ $ 425		$   5,100.00	$   5,100.00	$   5,100.00
			$ 13,550.00	$ 13,550.00	$ 13,550.00
Less:	COGS		$ (8,225.00)	$ (8,375.00)	$ (8,259.31)
	Gross Profit		$   5,325.00	$   5,175.00	$   5,290.69

Workings:

For FIFo and LIFO
Particulars		Units	Rate	Amount
Beg. Inv		20	$ 225.00	$   4,500.00
Purchases:
9-Mar		10	$ 245.00	$   2,450.00
22-Mar		10	$ 255.00	$   2,550.00
30-Mar		7	$ 275.00	$   1,925.00
Goods available for sale		47		$ 11,425.00

COGS
FIFO						LIFO
Sales		Units	Rate	Amount		Sales		Units	Rate	Amount
5-Mar	From					5-Mar	From
	Beg. Inv	15	$ 225.00	$ 3,375.00			Beg. Inv	15	$ 225.00	$ 3,375.00
17-Mar	From					17-Mar	From
	Beg. Inv	5	$ 225.00	$ 1,125.00			9-Mar	8	$ 245.00	$ 1,960.00
	9-Mar	3	$ 245.00	$     735.00
				$ 1,860.00		27-Mar	From
							22-Mar	10	$ 255.00	$ 2,550.00
27-Mar	From						9-Mar	2	$ 245.00	$     490.00
	9-Mar	7	$ 245.00	$ 1,715.00						$ 3,040.00
	22-Mar	5	$ 255.00	$ 1,275.00
				$ 2,990.00					Total	$ 8,375.00
			Total	$ 8,225.00

	For Weighted Average
	Particulars		Units	Rate	Amount
	Beg. Inv		20	$ 225.00	$ 4,500.00
5-Mar	Sales		-15	$ 225.00	$(3,375.00)
	Balance		5	$ 225.00	$ 1,125.00
9-Mar	Purchase		10	$ 245.00	$ 2,450.00
	Balance		15	$ 238.33	$ 3,575.00
17-Mar	Sales		-8	$ 238.33	$(1,906.67)
	Balance		7	$ 238.33	$ 1,668.33
22-Mar	Purchase		10	$ 255.00	$ 2,550.00
	Balance		17	$ 248.14	$ 4,218.33
27-Mar	Sales		-12	$ 248.14	$(2,977.65)
	Balance		5	$ 248.14	$ 1,240.69
Total COGS ($ 3375 + $ 1906.67 + $ 2977.65)				=	$ 8,259.31

Note: Since no information regarding "Specific identification" has been provided, Cost of goods sold can't be determined