6-36 The Short Cut Lawnmower Store sells one type of lawnmower at a price of $200 per unit. On 1 June, it had an $800 accounts receivable balance and $600 accounts payable balance, as well as an inventory of 10 mowers costing $120 each. During June, its purchases and sales of mowers were:

Purchases Sales

8 June	7 mowers @125 each
15		11 mowers
21	6 mowers @ 121 each
26	14 mowers @ 124 each
30		8 mowers

All purchases and sales were on credit. No payments or collections were made during June. The business has a perpetual inventory system and uses bar codes to verify each sale, which allows the specific identification method of inventory valuation to be used. Of the 15 June sales, two were mowers from the beginning inventory, five were mowers purchased on 21 June and one was a mower purchased on 26 June.

Required:

a. Assume that the business uses the specific identification method, and that it counted its inventory at the close of business on 30 June to determine that it had eight mowers in stock. Calculate the ending balance of in the inventory account and the cost of goods sold.

b. Following on from (a) above, record the beginning balances in the accounts receivable, inventory and accounts payable accounts. Using accounts columns, record the purchases and sales transactions during June, and calculate the ending balances of all the accounts you need,

c. Assume the business uses the first-in , first out (FIFO) method and that it counted its inventory on the close of business on 30 June and determined that it had eight mowers in stock. Calculate the ending balance in the inventory account and the cost of goods sold.

d. Use the same information as for (c) above, but assume that the business uses the last in, first-out (LIFO) method to calculate the ending balance in the inventory account and the cost of goods sold.

e. Use the same information as for (c) above, but assume that the business uses the weighted average method to calculate the ending balance in the inventory account and the cost of goods sold.

f. Calculate the business' gross profit percentage for June using the specific identification method. How does this compare with this gross profit percentage of 40.8 percent for May? What might account for the difference?