Problem 5 Inventory cost Perpetual inventory system The following transactions affected Alpenrose Corporations merchandise inventory during the month of March 2016 March 1 Inventory on hand 3,000 units cost $8 00 each March 8 Purchased 5,000 units for $8 20 each on account March 14 Sold 4,000 units for $14 00 each on account March 18 Purchased 6,000 units for $8 40 each on account March 25 Sold 2,000 units for $14 00 each on account March 31 Inventory on hand 8,000 units Assume Alpenrose uses perpetual inventory system Determine the inventory balance Alpenrose would report on its March 31, 2016, balance sheet and the cost of goods sold it would report on its March 2016, income statement using each of the following cost flow methods First in, first out (FIFO) Date Entry Units Cost Total Cost Cost of goods sold March 1 Open Inventory 3000 8 00 24,000 March 8 Purchased 5000 8 20 41,000 March 14 Sold 4000 14 00 24,000 March 18 Purchased 6000 8 40 82,000 24,000 March 25 Sold 2000 14 00 8200 March 31 Inventory on hand 8000 66,800 48,600 Total inventory 2000 units 8 20 16,400 6000 units 8 40 50,400 Total Inventory 66,800 Cost of goods sold Total 48,600 Last in, first out (LIFO) Date Entry Units Cost Total Cost Cost of goods sold March 1 Open Inventory 3000 8 00 24,000 March 8 Purchased 5000 8 20 41,000 March 14 Sold 4000 14 00 32,800 32,800 March 18 Purchased 6000 8 40 50,400 March 25 Sold 2000 14 00 16,800 16,800 March 31 Inventory on hand 8000 65,800 49,600 Total Inventory 3000 units 8 00 24,000 1000 units 8 20 8200 4000 units 8 40 33,600 Total 65,800 Cost of Goods sold Total 49,600 Problem 6 Inventory cost Periodic system Refer to the information provided in Problem 7 Now assume Alpenrose uses periodic inventory system Determine the inventory balance Alpenrose would report on its March 31, 2016, balance sheet and the cost of goods sold it would report on its March 2016, income statement using each of the following cost flow methods 1 First in, first out (FIFO) 2 Last in, first out (LIFO) 3 Average cost (round the average cost per unit to the nearest dollar)

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 17, 2024

Problem 5: Inventory cost Perpetual inventory system The following transactions affected Alpenrose Corporations merchandise inventory during the month of March 2016: March 1 Inventory on

Problem 5: Inventory cost Perpetual inventory system

The following transactions affected Alpenrose Corporations merchandise inventory during the month of March 2016:

March 1 Inventory on hand 3,000 units; cost $8.00 each.

March 8 Purchased 5,000 units for $8.20 each on account.

March 14 Sold 4,000 units for $14.00 each on account.

March 18 Purchased 6,000 units for $8.40 each on account.

March 25 Sold 2,000 units for $14.00 each on account.

March 31 Inventory on hand 8,000 units.

Assume Alpenrose uses perpetual inventory system. Determine the inventory balance Alpenrose would report on its March 31, 2016, balance sheet and the cost of goods sold it would report on its March 2016, income statement using each of the following cost flow methods:

First-in, first-out (FIFO)

Date	Entry	Units	Cost	Total Cost	Cost of goods sold
March 1	Open Inventory	3000	8.00	24,000
March 8	Purchased	5000	8.20	41,000
March 14	Sold	4000	14.00	24,000
March 18	Purchased	6000	8.40	82,000	24,000
March 25	Sold	2000	14.00		8200
March 31	Inventory on hand	8000		66,800	48,600

Total inventory:

2000 units * 8.20 = 16,400

6000 units * 8.40 = 50,400

Total Inventory 66,800

Cost of goods sold:

Total = 48,600

Last-in, first-out (LIFO)

Date	Entry	Units	Cost	Total Cost	Cost of goods sold
March 1	Open Inventory	3000	8.00	24,000
March 8	Purchased	5000	8.20	41,000
March 14	Sold	4000	14.00	32,800	32,800
March 18	Purchased	6000	8.40	50,400
March 25	Sold	2000	14.00	16,800	16,800
March 31	Inventory on hand	8000		65,800	49,600

Total Inventory:

3000 units * 8.00 = 24,000

1000 units * 8.20 = 8200

4000 units * 8.40 = 33,600

Total 65,800

Cost of Goods sold:

Total = 49,600

Problem 6. Inventory cost Periodic system

Refer to the information provided in Problem 7. Now assume Alpenrose uses periodic inventory system. Determine the inventory balance Alpenrose would report on its March 31, 2016, balance sheet and the cost of goods sold it would report on its March 2016, income statement using each of the following cost flow methods:

1. First-in, first-out (FIFO)

2. Last-in, first-out (LIFO)

3. Average cost (round the average cost per unit to the nearest dollar)