Question

Required information

Problem 5-1A Perpetual: Alternative cost flows LO P1

[The following information applies to the questions displayed below.]
  
Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
  

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Mar.

1

Beginning inventory

100

units

@ $50.00 per unit

Mar.

5

Purchase

400

units

@ $55.00 per unit

Mar.

9

Sales

420

units

@ $85.00 per unit

Mar.

18

Purchase

120

units

@ $60.00 per unit

Mar.

25

Purchase

200

units

@ $62.00 per unit

Mar.

29

Sales

160

units

@ $95.00 per unit

Totals

820

units

580

units

Problem 5-1A Part 3

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 340 units from the March 5 purchase; the March 29 sale consisted of 40 units from the March 18 purchase and 120 units from the March 25 purchase.

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Mar							100	50	5000
5-Mar	400	55	22000				100	50	5000
							400	55	22000
9-Mar				100	50	5000
				320	55	17600	80	55	4400
18-Mar	120	60	7200				80	55	4400
							120	60	7200
25-Mar	200	62	12400				80	55	4400
							120	60	7200
							200	62	12400
29-Mar				80	55	4400	40	60	2400
				80	60	4800	200	62	12400
TOTAL	720		41600	580		31800	240		14800
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL LIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Mar							100	50	5000
5-Mar	400	55	22000				100	50	5000
							400	55	22000
9-Mar				400	55	22000
				20	50	1000	80	50	4000
18-Mar	120	60	7200				80	50	4000
							120	60	7200
25-Mar	200	62	12400				80	50	4000
							120	60	7200
							200	62	12400
29-Mar				160	62	9920	80	50	4000
							120	60	7200
							40	62	2480
TOTAL	720		41600	580		32920	240		13680
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL WEIGHTED AVERAGE METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Mar							100	50	5000
5-Mar	400	55	22000				100	50	5000
							400	55	22000
Average							500	54	27000
9-Mar				420	54	22680	80	54	4320
18-Mar	120	60	7200				80	54	4320
							120	60	7200
25-Mar	200	62	12400				80	54	4320
							120	60	7200
							200	62	12400
Average							400	59.8	23920
29-Mar				160	59.8	9568	240	59.8	14352
TOTAL	720		41600	580		32248	240	59.8	14352
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC SPECIFIC IDENTIFICATION METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Mar	100	50	5000	80	50	4000	20	50	1000
Purchasse
5-Mar	400	55	22000	340	55	18700	60	55	3300
18-Mar	120	60	7200	40	60	2400	80	60	4800
25-Mar	200	62	12400	120	62	7440	80	62	4960
TOTAL	820		46600	580		32540	240		14060
			Ending Inventory
FIFO			14800
LIFO			13680
Average			14352
Specific Identification			14060