1)Ruxton Company, which uses a periodic inventory system, had a beginning inventory on May 1, of 400 units of Product A at a cost of $14 per unit.During May, the following purchases and sales were made.

Purchases Sales

May 6 375 units at $18 May 4 275 units

14 250 units at $20 8 350 units [12]

21 300 units at $22 17 400 units

28 425 units at $26 24 225 units

1,350 1,250

Calculate the May 31 ending inventory and May cost of goods sold under (a) Average Cost, (b) FIFO, and (c) LIFO.Provide appropriate supporting calculations.

(a) Average - Ending Inventory = $_________; Cost of Goods Sold = $_________.

(b) FIFO - Ending Inventory = $_________; Cost of Goods Sold = $_________.

(c) LIFO - Ending Inventory = $_________; Cost of Goods Sold = $_________.

2)Complete the requirements specified for each of the following independent situations. [12]

A. A major portion of Gwynn Furniture Sales was destroyed by fire. Accounting records provide the following information:

Sales $200,000 Purchases $140,000

Sales Returns and Allowances 25,000 Purchases Returns and Allowances 6,000

Beginning Inventory 30,000 Freight In 19,000

Assuming a gross profit rate of 40% on net sales and that undamaged inventory is appropriately valued at $25,000, calculate the cost of the merchandise destroyed by the fire.

B. Karros Co. uses the retail inventory method. Given the following information, calculate the ending inventory at cost.

Cost Retail

Beginning Inventory $25,000 $35,000

Purchases 95,000 125,000

Sales 110,000

Sales Returns and Allowances 10,000

C. Witt Company uses the lower of cost and market (LCM) basis for its inventory. The following information relates to its December 31, 2001 inventory. Prepare the journal entry to record the inventory at LCM, assuming the company applies LCM to total inventory.

December 31, 2001

Product Units Unit Cost Market

A 240 $15 14

B 250 24 21

C 300 16 18

D 125 30 28

E 150 12 14

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