Refer to the information in Problem 6-12A. Assume that the company uses a perpetual inventory system. Also assume that monthly purchases of inventory occur on the first day of each month.
In Problem 6-12A
Sherman Office Supplies distributes office furniture. The company's fiscal year ends on December 31, 2014. On September 30, 2014, one department in the company had in inventory 20 office suites that cost $1,800 each. During the quarter, the department purchased merchandise on account as follows:

Sales for each month in the quarter were as follows:

Operating expenses in the quarter were $110,000.
Required
1. Determine the cost of the department's ending inventory at December 31, 2014, under
(a) Moving-weighted-average costing,
(b) FIFO costing.
2. Prepare the department's income statement for the quarter ended December 31, 2014, under each method described in Requirement 1. Show gross margin and operating income.

Transcribed Image Text:

Units Unit Cost Total October November December 60 40 $111,000 76,000 $1,850 1,900 1,950 58,500 Units Unit Selling Price Total October November December 50 20 $3,600 3,700 3,800 $180,000 34 74,000 129,200