Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 5-3A Perpetual: Alternative cost flows LO P1 Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sale transactions

image text in transcribed
image text in transcribed
image text in transcribed
Problem 5-3A Perpetual: Alternative cost flows LO P1 Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sale transactions Date Activities Beginning . Units Sold at Retail Jan. 1 inventory Units Acquired at Cost 600 units @ $60 per unit 480 units ! $57 per unit 120 units $42 per Feb. 10 Purchase Mar. 13 Purchase Mar. 15 Sales 785 units @ $80 per unit Aug. 21 Purchase unit Sept. 5 Purchase 180 units @ $65 per 470 units @ $63 per unit Sept. 10 Sales Totals 1,850 units 650 units e $80 per -unit 1,435 units Required: 1. Compute cost of goods available for sale and the number of units available for sale. Cost of goods available for sale Number of units available for sale units 2. Compute the number of units in ending inventory. Ending inventory units 3. Compute the cost assigned to ending inventory using (6) FIFO (6) LIFO. ( weighted average, and (d) specific identification. For specific identification, units sold consist of 600 units from beginning inventory. 380 from the February 10 purchase, 120 from the March 13 purchase, 130 from the August 21 purchase, and 205 from the September 5 purchase. Complete this question by entering your answers in the tabs below. Perpetual Perpetual Weighted Specific FIFO LIFO Average Id Compute the cost assigned to ending inventory using FIFO. (Round your average cost per unit to 2 decimal places.) Perpetual FIFO: Goods Purchased Cost Date units per Cost of Goods Sold Inventory Balance # of Cost of # of units Cost sold per unit Goods Sold # of units Cost per unit Inventory Balance Unit Jan 1 600 @ 60.00 - 36,000.00 Feb 10 Mar 13 HILLITI Mar 15 Aug 21 Sept 5 Sept 10 Perpetual LIFO > 4. Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places.) FIFO LIFO Weighted Specific Average Identification Sales Less: Cost of goods sold Gross profit 5. The company's manager earns a bonus based on a percent of gross profit. Which method of inventory costing produces the highest bonus for the manager? FIFO LIFO Weighted Average Specific identification

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals of Financial Management

Authors: Eugene F. Brigham

Concise 9th Edition

1305635937, 1305635930, 978-1305635937

Students also viewed these Accounting questions