Answered step by step
Verified Expert Solution
Question
1 Approved Answer
ABC had a beginning inventory on January 1 of 100 units of Product X at a cost of $20 per unit. During the year, the
ABC had a beginning inventory on January 1 of 100 units of Product X at a cost of $20 per unit.
During the year, the following purchases were made.
- Purchase 1 - 150 units at $18
- Purchase 2 - 250 units at $16
- Purchase 3 - 150 units at $14
- Purchase 4 - 200 units at $12
The Company uses a periodic inventory system and has 150 units on hand according to physical count.
Instructions
- Determine the (1) units available for sale, (2) cost of goods available for sale for the year, (3) units sold. (1.5 points - 0.5 points each)
- Determine the cost of ending inventory using the Last In First Out Method. (2 points)
- Determine the cost of goods sold using the Last In First Out Method using the formula. (2 points)
- Prove the accuracy of the cost of goods sold computed above using the Last In First Out Method. (2 points)
- Calculate the Gross Profit using the number of units sold calculated above and assuming that the goods were sold at $40 per unit. (2 points)
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