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	Cost per Unit	Total Cost
March 1	Beginning inventory	20	$250	$	5,000
March 5	Sale ($400 each)	15
March 9	Purchase	10	270		2,700
March 17	Sale ($450 each)	8
March 22	Purchase	10	280		2,800
March 27	Sale ($475 each)	12
March 30	Purchase	9	300		2,700
				$	13,200
7. If Greg’s Bicycle Shop chooses to report inventory using LIFO instead of FIFO, record the LIFO adjustment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)    5. Calculate sales revenue and gross profit under each of the four methods.(Round weighted-average cost amounts to 2 decimal places.)

Answer 1

7.

Date	Transactions	Units	SP per Unit	Total SP
March 5	Sale ($400 each)	15	400	6,000
March 17	Sale ($450 each)	8	450	3,600
March 27	Sale ($475 each)	12	475	5,700
	Total Units Sold	35		15,300

Inventory Under FIFO
Date	Transactions	Units	Cost per Unit	Total Cost
March 22	Purchase	5	280	1,400
March 30	Purchase	9	300	2,700
	Total Units	14

Inventory Under LIFO
Date	Transactions	Units	Cost per Unit	Total Cost
March 1	Beginning inventory	14	250	3500

Inventory Under LIFO	3500
Inventory Under FIFO	2,700
Net Change	800

Accounts Description	Debit	Credit
Stock	800
Cost of Goods Sold		800
(Being Inventory Valuation Method Changed)

Please, not that the changes are done in the same year that is why Cost of Goods sold is used. If the method is changed after the close of year we will use Retained Earnings.

5.

Total Sales Revenue

15,300

Gross Profit=

Sales- Cost of Goods Sold

Cost of Goods Sold

Opening Stock + Purchases - Closing Stock

Gross Profit(FIFO)	15300-(5000+8200-2700)	4,800
Gross Profit(LIFO)	15300-(5000+8200-3500)	5,600
Gross Profit(Weigh Average))	15300-(5000+8200-3771.43)	5,871.43

Date	Transactions	Units	Cost per Unit	Total Cost
March 1	Beginning inventory	20	250	5,000
March 9	Purchase	10	270	2,700
March 22	Purchase	10	280	2,800
March 30	Purchase	9	300	2,700
		49		13,200

Weighted Average Closing Stock

13200/49*14

3,771.43

Please note that 4th Method is not mentioned so not calculated.

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