PLEASE SKIP QUESTION 1

Neverstop Corporation sells item A as part of its product line. Information about the beginning inventory, purchases, and sales of item A are given in the following table for the first six months of 2017. The company uses a perpetual inventory system: Date January 1 (beginning inventory) January 24 February 8 March 16 June 11 Purchases Sales Number of Units Unit Cost Number of Units Sales Price 590 $4.30 390 $5.80 690 $4.40 650 $6.00 390 $4.55 Required: 1. Compute the cost of ending inventory by using the weighted-average costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Ending inventory $ 2,825.11 2. Compute the gross profit for the first six months of 2017 by using the FIFO costing method. (Do not round intermediate calculations and round the final answer to 2 decimal places.) Gross profit 3. Would the gross profit be higher, lower, or the same if Neverstop used the weighted- average costing method rather than the FIFO method? Remain the same Lower Higher 4. Prepare journal entries to record the purchase and sale transactions, as well as the cost of sales, assuming that the weighted average method is used. (Do not round intermediate calculations and round the final answers to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list X 1 Record sales on account. 2 Record cost of sales on goods sold on account. 3 Record purchase of goods on account. 4 Record sales on account. 5 Record cost of sales on goods sold on account. Credit 6 Record purchase of goods on account. Note : = journal entry has been entered Record entry Clear entry View general journal Assume that because of a clerical error, the ending inventory is reported to be 530 units rather than the actual number of units (630) on hand. 5a. If FIFO is used, calculate the amount of the understatement or overstatement in the cost of sales for the first six months of 2017. of cost of sales Overstatement Understatement 5b. If FIFO is used, calculate the amount of the understatement or overstatement in the current assets at June 30, 2017 of current assets Overstatement Understatement