Question
HOMEWORK PROBLEM 2: Stocks, Inc., sells weight-lifting equipment. The sales and inventory records of the company for January through March 2017 were as follows: Weight
HOMEWORK PROBLEM 2:
Stocks, Inc., sells weight-lifting equipment. The sales and inventory records of the company for January through March 2017 were as follows:
| Weight Sets | Unit Cost | Total Cost |
Beginning inventory, January 1 | 460 | $30 | $13,800 |
Purchase, January 16 | 110 | 32 | 3,520 |
Sale, January 25 ($45 per set) | 216 | 45 | 9,720 |
Purchase, February 16 | 105 | 36 | 3,780 |
Sale, February 27 ($40 per set) | 307 | 40 | 12,280 |
Purchase, March 10 | 150 | 28 | 4,200 |
Sale, March 30 ($50 per set) | 190 | 50 | 9,500 |
Determine the amounts for ending inventory, cost of goods sold, and gross profit under the FIFO, LIFO and Average Cost costing alternatives. Use the periodic inventory method, which means that all sales are assumed to happen at the end of the period no matter when they actually occurred. Round amounts to the nearest dollar.
Calculate Cost of Goods Available for Sale:
Date | Units | Price |
| Total |
Beginning inventory | 460 | $30 | Beginning Inventory | 13,800 |
January 16 | 110 | $32 | + purchases | 3,520 |
February 16 | 105 | $36 | + purchases | 3,780 |
March 10 | 150 | $28 | + purchases | 4,200 |
TOTAL | 825 | 126 | = Goods available for sale | 25,300 |
LIFO:
Calculate LIFO Ending Inventory:
How many sets were sold?
Ending inventory would be the oldest
Date | Price | Total |
|
|
|
TOTAL ENDING INVENTORY |
|
|
Calculate LIFO Cost of Goods Sold:
This would be the newest sets from inventory:
Date | Price | Total |
| $28 |
|
| $36 |
|
| $32 |
|
| $30 |
|
LIFO COGS: |
|
|
Calculate LIFO Gross Profit:
Gross Profit:
Sales: |
|
-COGS |
|
Gross Profit |
|
Calculate Average Cost:
Average Cost per Unit: Goods Available for Sale/Number of Units
Average Cost Ending Inventory:
Average Cost of Goods Sold:
Average Cost Gross Profit:
Sales: |
|
-COGS |
|
Gross Profit |
|
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