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Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions...

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 240 units @ $53.80 per unit
Mar. 5 Purchase 295 units @ $58.80 per unit
Mar. 9 Sales 400 units @ $88.80 per unit
Mar. 18 Purchase 155 units @ $63.80 per unit
Mar. 25 Purchase 290 units @ $65.80 per unit
Mar. 29 Sales 270 units @ $98.80 per unit
Totals 980 units 670 units

4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 135 units from beginning inventory and 265 units from the March 5 purchase; the March 29 sale consisted of 115 units from the March 18 purchase and 155 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

Solutions

Expert Solution

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 240 53.8 12912
5-Mar 295 58.8 17346 240 53.8 12912
295 58.8 17346
9-Mar 240 53.8 12912 135 58.8 7938
160 58.8 9408
18-Mar 155 63.8 9889 135 58.8 7938
155 63.8 9889
25-Mar 290 65.8 19082 135 58.8 7938
155 63.8 9889
290 65.8 19082
29-Mar 135 58.8 7938 20 63.8 1276
135 63.8 8613 290 65.8 19082
TOTAL 740 46317 670 38871 310 20358
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 240 53.8 12912
5-Mar 295 58.8 17346 240 53.8 12912
295 58.8 17346
9-Mar 295 58.8 17346 135 53.8 7263
105 53.8 5649
18-Mar 155 63.8 9889 135 53.8 7263
155 63.8 9889
25-Mar 290 65.8 19082 135 53.8 7263
155 63.8 9889
290 65.8 19082
29-Mar 270 65.8 17766 135 53.8 7263
155 63.8 9889
20 65.8 1316
TOTAL 740 46317 670 40761 310 18468
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 240 53.8 12912
5-Mar 295 58.8 17346 240 53.8 12912
295 58.8 17346
Average 535 56.56 30258
9-Mar 400 56.56 22624 135 56.56 7634
18-Mar 155 63.8 9889 135 56.56 7634
155 63.8 9889
25-Mar 290 65.8 19082 135 56.56 7634
155 63.8 9889
290 65.8 19082
Average 580 63.11 36605
29-Mar 270 63.11 17040 310 63.11 19565
TOTAL 740 46317 670 39664 310 63.11 19565
STATEMENT SHOWING INVENTORY RECORD UNDER SPECIFIC IDENTIFICATION
RECIEPTS COST OF GOODS SOLD BALANCE
DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $
1-Mar 240 53.8 12912
5-Mar 295 58.8 17346 240 53.8 12912
295 58.8 17346
9-Mar 135 53.8 7263 105 53.8 5649
265 58.8 15582 30 58.8 1764
18-Mar 155 63.8 9889 105 53.8 5649
30 58.8 1764
155 63.8 9889
25-Mar 290 65.8 19082 105 53.8 5649
30 58.8 1764
155 63.8 9889
290 65.8 19082
29-Mar 115 63.8 7337 105 53.8 5649
155 65.8 10199 30 58.8 1764
40 63.8 2552
135 65.8 8613
TOTAL 740 46317 670 40381 310 18578
GROSS PROFIT
FIFO LIFO AVERAGE SPECIFIC
sales (400 unist @88.80+ 270 units @98.80) 62196 62196 62196 62196
Less: COGS 38871 40761 39664 40381
Gross profits 23325 21435 22532 21815

ekkarill92 answered 11 months ago
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