Question

Chapter 6 - MP06-01
iNVENTORY rECORDS

Widget Tek Inc.’s original accountant accepted a position with another firm and left in early March. You have been asked to review the subsidiary inventory ledger record for Widget Tek Inc.’s main product for March.

Date	Inventory
	Quantity	Unit Cost	Total Cost
Mar. 1	850	$98.00	$83,300
	1,275	$95.00	$121,125
Mar. 8	650	$98.00	$63,700
Mar. 11	325	$98.00	$31,850
Mar. 14	325	$98.00	$31,850
	780	$103.00	$80,340
Mar. 22	260	$98.00	$25,480
Mar. 25	260	$98.00	$25,480
	2,000	$104.00	$208,000

Study the inventory record for March and answer the questions that follow.

1.	Assuming that the product sells for $155 and that 80% of sales are on account, determine the gross profit from sales for March. $_______________
2.	Making the same assumptions as in (1), determine the ending inventory cost for March. $___________
3.	Which inventory method is being used? LIFO

Answer 1