Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

ENDING INVENTORY:

Calculate FIFO Cost of Goods Sold:

This would be the oldest sets from inventory:

Date

Price

Total

$30

$32

$36

$28

FIFO COGS:

Calculate FIFO Gross Profit:

Calculate total sales:

Sales:

TOTAL SALES

Gross Profit:

Sales:

-COGS

Gross Profit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Benfords Law

Authors: Mark J. Nigrini

1st Edition

1118152859, 9781118152850

More Books

Students also viewed these Accounting questions

Question

Differentiate the function. r(z) = 2-8 - 21/2 r'(z) =

Answered: 1 week ago