Cycle Tech Bicycles operates on a fiscal year beginning January 1. At the beginning of the year,
Question:
Cycle Tech Bicycles operates on a fiscal year beginning January 1. At the beginning of the year, the shop had in stock six Model #8274, 10-speed bicycles, valued at $2,364 (6 bicycles @ $394 each). During the year the business made the following purchases:
There were seven bicycles in inventory at the end of the period. During the year the bicycles sold for $675 each.
Instructions
1. Calculate the cost of the ending inventory using the FIFO, LIFO, and weighted average cost methods.
2. Using the costs calculated in (1), determine the cost of merchandise sold for each inventory costing method.
3. Prepare a partial income statement for each inventory costing method showing sales and the calculation of gross profit on sales. Assume that the sales and purchases are net amounts.
Step by Step Answer:
Solution 1 FIFO Quantity on hand at the end of the period 6 Quantity on hand at the beginning of per...View the full answer
