Iron Hill began August with 65 units of iron inventory that cost $30 each. During August, the company completed the following inventory transactions: (Click the icon to view the transactions.) Read the requirements. Requirement 1. Prepare a perpetual inventory record for the merchandise inventory using the FIFO inventory costing method. Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Purchases Cost of Goods Sold Unit Total Unit Cost Total Cost Inventory on Hand Unit Total Quantity Cost Cost Date Quantity Quantity Cost Cost Aug. 1 81 21 301 Total * Data Table Units Unit Cost Unit Sales Price 50 $ 81 85 $ 50 Aug. 3 Sale 8 Purchase 21 Sale 30 Purchase 80 75 20 45 Print Done Requirement 2. Prepare a perpetual inventory record for the merchandise inventory using the LIFO inventory costing method. Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Purchases Inventory on Hand Cost of Goods Sold Units Total Unit Total Unit Total Date Quantity Cost Cost Quantity Cost Cost Quantity Cost Cost Aug. 1 8 21 301 Totals Requirement 3. Prepare a perpetual inventory record for the merchandise inventory using the weighted average inventory costing method Start by entering the beginning inventory balances. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. Purchases Cost of Goods Sold Unit Total Unit Total Inventory on Hand Unit Total Quantity Cost Cost Date Quantity Cost Cost Quantity Cost Cost Aug. 1 81 21 301 Totals Requirement 4. Determine the company's cost of goods sold for August using FIFO, LIFO, and weighted-average inventory costing methods. The cost of goods sold amount for August using FIFO inventory costing is $ The cost of goods sold amount for August using LIFO inventory costing is $ The cost of goods sold amount for August using weighted average inventory costing is $ Requirement 5. Compute gross profit for August using FIFO, LIFO, and weighted average inventory costing methods. Sales Revenue Cost of Goods Sold = Gross profit FIFO 11 LIFO 11 11 Weighted average Requirement 6. If the business wanted to maximize gross profit, which method would it select? If the business wanted to maximize gross profit, it would select the method
