Bennett Basketball sells a variety of basketballs and accessories. Information follows for Bennett Basketball's purchases and sales
Question:
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Bennett uses a perpetual inventory system. On February 1, Bennett had 36 units on hand at a cost of $21 each. All purchases and sales during February and March were on account.
Instructions
(a) Determine the cost of goods sold and ending inventory under a perpetual inventory system using (1) FIFO and (2) average. (Hint: Round the average cost per unit to three decimal places.)
(b) Calculate gross profit using (1) FIFO and (2) average.
(c) What impact, if any, does the choice of cost formula have on cash flows?
Taking It Further
What factors should Bennett's owner consider when choosing a cost formula?
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
Step by Step Answer:
a 1 FIFO Date Purchases Cost of Goods Sold Balance Units Cost Total Units Cost Total Units Cost Tota...View the full answer
Accounting Principles Part 1
ISBN: 978-1118306789
6th Canadian edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow
