Problem 5-1A Perpetual: Alternative cost flows @ P1 Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. (For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 340 units from the March 5 purchase; the March 29 sale consisted of 40 units from the March 18 purchase and 120 units from the March 25 purchase.) Units Sold at Retail Date Activities Units Acquired at Cost Mar. 1 Beginning inventory 100 units @ $50.00 per unit Mar. 5 Purchase 400 units @ $55.00 per unit Sales Mar. 18 Purchase 120 units @ $60.00 per unit Mar. 25 Purchase 200 units @ $62.00 per unit Mar. 29 Sales Totals 820 units Mar. 9 420 units @ $85.00 per unit 160 units @ $95.00 per unit 580 units Required 1. Compute cost of goods available for sale and the number of units available for sale. 2. Compute the number of units in ending inventory. 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (Round all amounts to cents.) Check (3) Ending inventory: FIFO, $14,800; LIFO, $13,680; WA, $14,352 4. Compute gross profit earned by the company for each of the four costing methods in part 3. (4) LIFO gross profit, $17,980 LIFO 4 5 5 6 Date Goods Purchased Cost of Goods Sold Inventory Balance 7 00 1-Mar 9 10 5-Mar 11 12 13 9-Mar 14 15 16 18-Mar 17 18 19 25-Mar 20 21 22 29-Mar 23 31 Average Cost 32 33 Date Goods Purchased Cost of Goods Sold Inventory Balance 34 35 1-Mar 36 37 5-Mar 38 39 40 41 42 9-Mar 43 44 45 18-Mar 46 47 48 49 25-Mar 2 Problem 5-1A Continued 3 4 5 6 Warnerwoods Company Income Statement For month Ended March 31 7 8 Specific Weighted identification Average 9 FIFO LIFO LO 11 12 Sales 13 14 Cost of Goods Sold 15 Gross Profit 16 Expenses 17 Income before taxed 18 Income tax expense (30%) 19 net Income 20