Question

Assume that Dunk Coffee Shop completed the following periodic inventory transactions for a line of merchandise​ inventory: LOADING...​(Click the icon to view the​ transactions.) Requirements 1. Compute ending merchandise​ inventory, cost of goods​ sold, and gross profit using the FIFO inventory costing method. 2. Compute ending merchandise​ inventory, cost of goods​ sold, and gross profit using the LIFO inventory costing method. 3. Compute ending merchandise​ inventory, cost of goods​ sold, and gross profit using the​ weighted-average inventory costing method.​ (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest​ dollar.) Requirements​ 1., 2., and 3. Compute ending merchandise​ inventory, cost of goods​ sold, and gross profit using the​ (1) FIFO inventory costing​ method, (2) LIFO inventory costing​ method, and​ (3) weighted-average inventory costing method.​ (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest​ dollar.) Begin by determining ending merchandise inventory and cost of goods sold under each of the three methods. Requirement 1. FIFO Beginning merchandise inventory $357 Plus: Net purchases 602 Cost of goods available for sale 959 Less: Ending merchandise inventory (260) Cost of goods sold $699 Requirement 2. LIFO 959 Enter any number in the edit fields and then click Check Answer. 4 parts remaining More Info Jun. 1 Beginning merchandise inventory 17 units @ $21 each 12 Purchase 12 units @ $22 each 20 Sale 14 units @ $31 each 24 Purchase 13 units @ $26 each 29 Sale 18 units @ $31 each

Answer 1

Ans.	Available for sale
	Date		Units	Rate	Total
	1-Jun		17	$21.00	$357
	12-Jun		12	$22.00	$264
	24-Jun		13	$26.00	$338
	Cost of goods available for sale		42		$959
	Units sold   (14 + 18) =   32 units
Ans. 1	Periodic FIFO:
	Date	Units	Rate	Total
	1-Jun	17	$21.00	$357
	12-Jun	12	$22.00	$264
	24-Jun	3	$26.00	$78
	Cost of goods sold	32		$699
	Ending inventory = Cost of goods available for sale - Cost of goods sold
	$959 - $699
	$260
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.
Ans. 2	Periodic LIFO:
	Date	Units	Rate	Total
	24-Jun	13	$26.00	$338
	12-Jun	12	$22.00	$264
	1-Jun	7	$21.00	$147
	Cost of goods sold	32		$749
	Ending inventory = Cost of goods available for sale - Cost of goods sold
	$959 - $749
	$210
	*In LIFO method the units that have purchased last, are released the first one and ending inventory units
	remain from the first purchase.
Ans. 3	Periodic Weighted Average:
	Average cost per unit =   Total cost of goods available for sale / Total units available
	$959 / 42
	$22.83	per unit
	Cost of goods sold   =   No. of units sold * Average cost per unit
	32 * $22.83
	$731
	Ending inventory = Cost of goods available for sale - Cost of goods sold
	$959 - $731
	$228
Ans.	Calculations for Gross profit:
			FIFO	LIFO	Weighted Avgerage
	Sales		$992	$992	$992
	Less: Cost of goods sold		$699	$749	$731
	Gross profit		$293	$243	$261
	*Calculation of sales:
	Date	Units	Rate	Cost
	20-Jun	14	$31.00	$434
	29-Jun	18	$31.00	$558
	Total sales			$992