Question
5-1A Perpetual: Alternative cost flows LO P1 [The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system. It entered
5-1A Perpetual: Alternative cost flows LO P1
[The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
Date | Activities | Units Acquired at Cost | Units Sold at Retail | |||||||||
Mar. | 1 | Beginning inventory | 210 | units | @ $53.20 per unit | |||||||
Mar. | 5 | Purchase | 280 | units | @ $58.20 per unit | |||||||
Mar. | 9 | Sales | 370 | units | @ $88.20 per unit | |||||||
Mar. | 18 | Purchase | 140 | units | @ $63.20 per unit | |||||||
Mar. | 25 | Purchase | 260 | units | @ $65.20 per unit | |||||||
Mar. | 29 | Sales | 240 | units | @ $98.20 per unit | |||||||
Totals | 890 | units | 610 | units | ||||||||
Problem 5-1A Part 3
1. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 120 units from beginning inventory and 250 units from the March 5 purchase; the March 29 sale consisted of 100 units from the March 18 purchase and 140 units from the March 25 purchase.
4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 120 units from beginning inventory and 250 units from the March 5 purchase; the March 29 sale consisted of 100 units from the March 18 purchase and 140 units from the March 25 purchase
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started