Part $1$: Cost Flow Assumptions

$$ Assume the company uses the PERIODIC method for inventory.

$$ The same sets of fact are provided at the top of each page for your

convenience.

Method $1$: SPECIFIC IDENTIFICATION

Description Units Price$/$Unit Total

Price

June $1$ Beginning Inventory $10$ $$3$ $$30$

June $2$ Purchase $30$ $$4$ $$120$

June $10$ Purchase $40$ $$6$ $$240$

June $12$ Sale $60$ $$20$ $$1,200$

June $17$ Purchase $70$ $$7$ $$490$

June $21$ Purchase $50$ $$10$ $$500$

June $29$ Sale $80$ $$22$ $$1,760$

$$ Additional Information: The ending inventory consists of $15$ units purchased on $6/2,25$ units

purchased on $6/10,$ and the remaining units were purchased on $6/21.$

Find the following under the Specific Identification Method:

$(1)$ Ending Inventory at June $30$th

$(2)$ Cost of Goods Sold for the month of June

$(3)$ Gross Profit for the month of June

Method $2$: AVERAGE COST $->$ WEIGHTED$-$AVERAGE

Description Units Price$/$Unit Total

Price

June $1$ Beginning Inventory $10$ $$3$ $$30$

June $2$ Purchase $30$ $$4$ $$120$

June $10$ Purchase $40$ $$6$ $$240$

June $12$ Sale $60$ $$20$ $$1,200$

June $17$ Purchase $70$ $$7$ $$490$

June $21$ Purchase $50$ $$10$ $$500$

June $29$ Sale $80$ $$22$ $$1,760$

Find the following under the Average Cost Method:

$(1)$ Ending Inventory at June $30$th

$(2)$ Cost of Goods Sold for the month of June

$(3)$ Gross Profit for the month of June

Method $3$: FIRST$-$IN$-$FIRST$-$OUT $($FIFO$)$ METHOD

Description Units Price$/$Unit Total

Price

June $1$ Beginning Inventory $10$ $$3$ $$30$

June $2$ Purchase $30$ $$4$ $$120$

June $10$ Purchase $40$ $$6$ $$240$

June $12$ Sale $60$ $$20$ $$1,200$

June $17$ Purchase $70$ $$7$ $$490$

June $21$ Purchase $50$ $$10$ $$500$

June $29$ Sale $80$ $$22$ $$1,760$

Find the following under the FIFO Method:

$(1)$ Ending Inventory at June $30$th

$(2)$ Cost of Goods Sold for the month of June

$(3)$ Gross Profit for the month of June

Method $4$: LAST$-$IN$-$FIRST$-$OUT $($LIFO$)$ METHOD

Description Units Price$/$Unit Total

Price

June $1$ Beginning Inventory $10$ $$3$ $$30$

June $2$ Purchase $30$ $$4$ $$120$

June $10$ Purchase $40$ $$6$ $$240$

June $12$ Sale $60$ $$20$ $$1,200$

June $17$ Purchase $70$ $$7$ $$490$

June $21$ Purchase $50$ $$10$ $$500$

June $29$ Sale $80$ $$22$ $$1,760$

Find the following under the LIFO Method:

$(1)$ Ending Inventory at June $30$th

$(2)$ Cost of Goods Sold for the month of June

$(3)$ Gross Profit for the month of June

Part $2$: IMPACT OF MATERIAL MISSTATEMENTS

$$ Assume the company uses the PERIODIC method for inventory.

$$ For the sake of simplicity, these questions will appear in the same order on D$2$L$.$

$($The question numbers below match the question numbers on D$2$L$)$

$(18)$ If Year $1$s beginning inventory is overstated, what is the impact on Year $1$s Cost of Goods Sold?

$($a$)$ Overstated

$($b$)$ Understated

$($c$)$ No Impact

$(19)$ If Year $1$s beginning inventory is understated, what is the impact on Year $1$s Gross Margin?

$($a$)$ Overstated

$($b$)$ Understated

$($c$)$ No Impact

$(20)$ If Year $1$s beginning inventory is understated, what is the impact on Year $2$s Cost of Goods Sold?

$($a$)$ Overstated

$($b$)$ Understated

$($c$)$ No Impact

$(21)$ If Year $1$s ending inventory is understated, what is the impact on Year $1$s Cost of Goods Sold?

$($a$)$ Overstated

$($b$)$ Understated

$($c$)$ No Impact

$(22)$ If Year $1$s ending inventory is overstated, what is the impact on Year $1$s Gross Margin?

$($a$)$ Overstated

$($b$)$ Understated

$($c$)$ No Impact

$(23)$ If Year $1$s ending inventory is understated, what is the impact on Year $2$s Cost of Goods Sold?

$($a$)$ Overstated

$($b$)$ Understated

$($c$)$ No Impact

$(24)$ If Year $1$s net cost of purchases is understated, what is the impact on Year $1$s Cost of Goods Sold?

$($a$)$ Overstated

$($b$)$ Understated

$($c$)$ No Impact