Question

Required information [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 90 units @ $50.80 per unit Mar. 5 Purchase 220 units @ $55.80 per unit Mar. 9 Sales 250 units @ $85.80 per unit Mar. 18 Purchase 80 units @ $60.80 per unit Mar. 25 Purchase 140 units @ $62.80 per unit Mar. 29 Sales 120 units @ $95.80 per unit Totals 530 units 370 units 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 60 units from beginning inventory and 190 units from the March 5 purchase; the March 29 sale consisted of 40 units from the March 18 purchase and 80 units from the March 25 purchase.

Answer 1

Solution a:

Computation of ending inventory Coct under FIFO
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Mar	90	$50.80	$4,572	0	$0.00	$0	0	$0.00	$0	90	$50.80	$4,572.00
5-Mar	90	$50.80	$4,572	220	$55.80	$12,276	0	$0.00	$0	90	$50.80	$4,572
										220	$55.80	$12,276
9-Mar	90	$50.80	$4,572	0	$0.00	$0	90	$50.80	$4,572	60	$55.80	$3,348.00
	220	$55.80	$12,276				160	$55.80	$8,928
18-Mar	60	$55.80	$3,348.00	80	$60.80	$4,864.00	0	$0.00	$0.00	60	$55.80	$3,348.00
										80	$60.80	$4,864.00
25-Mar	60	$55.80	$3,348.00	140	$62.80	$8,792.00	0	$0.00	$0.00	60	$55.80	$3,348.00
	80	$60.80	$4,864.00							80	$60.80	$4,864.00
										140	$62.80	$8,792.00
29-Mar	60	$55.80	$3,348.00	0	$0.00	$0.00	60	$55.80	$3,348.00	20	$60.80	$1,216.00
	80	$60.80	$4,864.00				60	$60.80	$3,648.00	140	$62.80	$8,792.00
	140	$62.80	$8,792.00
Total cost assigned to Ending inventory												$10,008.00

Solution b:

Computation of ending inventory Cost under LIFO
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Mar	90	$50.80	$4,572	0	$0.00	$0	0	$0.00	$0	90	$50.80	$4,572.00
5-Mar	90	$50.80	$4,572	220	$55.80	$12,276	0	$0.00	$0	90	$50.80	$4,572
										220	$55.80	$12,276
9-Mar	90	$50.80	$4,572	0	$0.00	$0	220	$55.80	$12,276	60	$50.80	$3,048.00
	220	$55.80	$12,276				30	$50.80	$1,524
18-Mar	60	$50.80	$3,048.00	80	$60.80	$4,864.00	0	$0.00	$0.00	60	$50.80	$3,048.00
										80	$60.80	$4,864.00
25-Mar	60	$50.80	$3,048.00	140	$62.80	$8,792.00	0	$0.00	$0.00	60	$50.80	$3,048.00
	80	$60.80	$4,864.00							80	$60.80	$4,864.00
										140	$62.80	$8,792.00
29-Mar	60	$50.80	$3,048.00	0	$0.00	$0.00	120	$62.80	$7,536.00	60	$50.80	$3,048.00
	80	$60.80	$4,864.00							80	$60.80	$4,864.00
	140	$62.80	$8,792.00							20	$62.80	$1,256.00
Total cost assigned to Ending inventory												$9,168.00

Solution c:

Computation of ending inventory COST under Weighted Average
Date	Opening Stock			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Mar	90	$50.80	$4,572	0	$0.00	$0	0	$0.00	$0	90	$50.80	$4,572
5-Mar	90	$50.80	$4,572	220	$55.80	$12,276	0	$0.00	$0	310	$54.35	$16,848
9-Mar	310	$54.35	$16,848	0	$0.00	$0	250	$54.35	$13,587	60	$54.35	$3,261
18-Mar	60	$54.35	$3,261	80	$60.80	$4,864	0	$0.00	$0	140	$58.04	$8,125
25-Mar	140	$58.04	$8,125	140	$62.80	$8,792	0	$0.00	$0	280	$60.42	$16,917
29-Mar	280	$60.42	$16,917	0	$0.00	$0	120	$60.42	$7,250	160	$60.42	$9,667
Total cost assigned to Ending inventory												$9,667

Solution d:

Computation of ending inventory COST under Specific identification
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Mar	90	$50.80	$4,572	0	$0.00	$0	0	$0.00	$0	90	$50.80	$4,572.00
5-Mar	90	$50.80	$4,572	220	$55.80	$12,276	0	$0.00	$0	90	$50.80	$4,572
										220	$55.80	$12,276
9-Mar	90	$50.80	$4,572	0	$0.00	$0	60	$50.80	$3,048	30	$50.80	$1,524.00
	220	$55.80	$12,276				190	$55.80	$10,602	30	$55.80	$1,674.00
18-Mar	30	$50.80	$1,524.00	80	$60.80	$4,864.00	0	$0.00	$0.00	30	$50.80	$1,524.00
	30	$55.80	$1,674.00							30	$55.80	$1,674.00
										80	$60.80	$4,864.00
25-Mar	30	$50.80	$1,524.00	140	$62.80	$8,792.00	0	$0.00	$0.00	30	$50.80	$1,524.00
	30	$55.80	$1,674.00							30	$55.80	$1,674.00
	80	$60.80	$4,864.00							80	$60.80	$4,864.00
										140	$62.80	$8,792.00
29-Mar	30	$50.80	$1,524.00	0	$0.00	$0.00	40	$60.80	$2,432.00	30	$50.80	$1,524.00
	30	$55.80	$1,674.00				80	$62.80	$5,024.00	30	$55.80	$1,674.00
	80	$60.80	$4,864.00							40	$60.80	$2,432.00
	140	$62.80	$8,792.00							60	$62.80	$3,768.00
Total cost assigned to Ending inventory												$9,398.00