Problem 6-1A Perpetual: Alternative cost flows LO P1

[The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Mar.

1

Beginning inventory

240

units

@ $53.80 per unit

Mar.

5

Purchase

295

units

@ $58.80 per unit

Mar.

9

Sales

400

units

@ $88.80 per unit

Mar.

18

Purchase

155

units

@ $63.80 per unit

Mar.

25

Purchase

290

units

@ $65.80 per unit

Mar.

29

Sales

270

units

@ $98.80 per unit

Totals

980

units

670

units

Problem 6-1A Part 1

Required: 1. Compute cost of goods available for sale and the number of units available for sale.

Problem 6-1A Part 2

2. Compute the number of units in ending inventory.

Problem 6-1A Part 2

2. Compute the number of units in ending inventory.

Problem 6-1A Part 3

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 135 units from beginning inventory and 265 units from the March 5 purchase; the March 29 sale consisted of 115 units from the March 18 purchase and 155 units from the March 25 purchase.

Problem 6-1A Part 4

4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 135 units from beginning inventory and 265 units from the March 5 purchase; the March 29 sale consisted of 115 units from the March 18 purchase and 155 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)