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 |
FIFO:
Calculate FIFO Ending Inventory:
How many sets were sold?
Ending inventory would be the newest 112 sets:
Date | Price | Total |
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ENDING INVENTORY: |
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Calculate FIFO Cost of Goods Sold:
This would be the oldest sets from inventory:
Date | Price | Total |
| $30 |
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| $32 |
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| $36 |
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| $28 |
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FIFO COGS: |
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Calculate FIFO Gross Profit:
Calculate total sales:
Sales: |
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TOTAL SALES |
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Gross Profit:
Sales: |
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-COGS |
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Gross Profit |
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