Question
Problem 6-4AA Periodic: Alternative cost flows LO P1 Montoure Company uses a periodic inventory system. It entered into the following calendar-year 2015 purchases and sales
Problem 6-4AA Periodic: Alternative cost flows LO P1
Montoure Company uses a periodic inventory system. It entered into the following calendar-year 2015 purchases and sales transactions. |
Date | Activities | Units Acquired at Cost | Units Sold at Retail | |||||||||
Jan. | 1 | Beginning inventory | 710 | units | @ $45.00 per unit | |||||||
Feb. | 10 | Purchase | 455 | units | @ $42.00 per unit | |||||||
Mar. | 13 | Purchase | 255 | units | @ $27.00 per unit | |||||||
Mar. | 15 | Sales | 855 | units | @ $75.00 per unit | |||||||
Aug. | 21 | Purchase | 210 | units | @ $50.00 per unit | |||||||
Sept. | 5 | Purchase | 610 | units | @ $46.00 per unit | |||||||
Sept. | 10 | Sales | 900 | units | @ $75.00 per unit | |||||||
Totals | 2,240 | units | 1,755 | 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. For specific identification units sold consist of 710 units from beginning inventory, 245 from the February 10 purchase, 255 from the March 13 purchase, 105 from the August 21 purchase, and 440 from the September 5 purchase. (Round your average cost per unit to 2 decimal places.) |
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.) |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started