Question

The beginning inventory at Funky Party Supplies and data on purchases and sales for a three-month period ending March 31, 2016, are as follows:

Date		Transaction	Number of Units	Per Unit	Total
Jan.	1	Inventory	2,500	$60.00	$150,000
	10	Purchase	7,500	68.00	510,000
	28	Sale	3,750	120.00	450,000
	30	Sale	1,250	120.00	150,000
Feb.	5	Sale	500	120.00	60,000
	10	Purchase	18,000	70.00	1,260,000
	16	Sale	9,000	125.00	1,125,000
	28	Sale	8,500	125.00	1,062,500
Mar.	5	Purchase	15,000	71.60	1,074,000
	14	Sale	10,000	125.00	1,250,000
	25	Purchase	2,500	72.00	180,000
	30	Sale	8,750	125.00	1,093,750

	Instructions
1.	Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the first-in, first-out method The method of inventory costing based on the assumption that the costs of merchandise sold should be charged against revenue in the order in which the costs were incurred. and the periodic inventory system.
2.	Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the last-in, first-out method The method of inventory costing based on the assumption that the cost of merchandise sold is the cost of the most recent purchases. and the periodic inventory system.
3.	Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the weighted average cost method The method of inventory costing in which a weighted average unit cost for each item is computed each time a purchase is made. and the periodic inventory system. Round the weighted average unit cost to the nearest cent.
4.	Compare the gross profit and the March 31, 2016, inventories.

none

X

FIFO

1. Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the first-in, first-out method

The method of inventory costing based on the assumption that the costs of merchandise sold should be charged against revenue in the order in which the costs were incurred.

and the periodic inventory system.

Merchandise inventory, March 31, 2016
Cost of merchandise sold

Points:

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none

X

LIFO

2. Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the last-in, first-out method

The method of inventory costing based on the assumption that the cost of merchandise sold is the cost of the most recent purchases.

and the periodic inventory system.

Merchandise inventory, March 31, 2016
Cost of merchandise sold

Points:

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none

X

Weighted Average

3. Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the weighted average cost method

The method of inventory costing in which a weighted average unit cost for each item is computed each time a purchase is made.

and the periodic inventory system. Round the weighted average unit cost to the nearest cent.

Merchandise inventory, March 31, 2016
Cost of merchandise sold

Points:

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Final Question

4. Compare the gross profit and the March 31, 2016, inventories, using the following column headings.

Question not attempted.

1		FIFO	LIFO	Weighted Average
2	Sales
3	Cost of merchandise sold
4	Gross profit
5
6	Inventory, March 31, 2016

Solution

1		FIFO	LIFO	Weighted Average
2	Sales
3	Cost of merchandise sold
4	Gross profit
5
6	Inventory, March 31, 2016

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Answer 1