Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system Assume its accounting records provided the following information at the end of the annual accounting period, December 31 Unit Cost 200 32 Transactions Beginning inventory, January 1 Transactions during the yeart 1. Purchase on account, March 2 . Cash sale, April 1 (546 each) c. Purchase on account, June 30 d. Cash sale, August 1 (546 each) (350) shoes TIP: Although the purchases and sales are listed in chronological order, Scrappers determines the cost of goods sold after all of the purchases have occurred Required: 1. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods o. Last-in, first-out b. Weighted average cost c. First in, first-out d. Specific Identification, assuming that the April 1 sale was selected one-fifth from the beginning inventory and four-fifths from the purchase of March 2. Assume that the sale of August I was selected from the purchase of June 30 2. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes? a. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 using the LIFO method. (Round "Cost per Unit" anwers to 2 decimal places.) LEO (Perdic) Units Cost per Total Unit Beginning Inventory Purchases March 2 June 30 Total Purchases Goods Available for Sale Cost of Goods Sold Units from Beginning Inventory Units from March 2 Purchase Units from June 30 Purchase Total Cost of Goods Sold Ending Inventory RA Req 18 > b. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 using the Weighted average method. (Round "Cost per Unit" anwers to 2 decimal places.) Wighted Averago Costi Parodie) Total Unit Beginning Inventory Purchases March 2 June 30 Total Purchases Goods Available for Sale Cost of Goods Sold Ending Inventory Reg 1A Req 18 Reg 1C Req ID Req 2A Reg 2B Cost per c. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 using the FIFO method. (Round "Cost per Unit" anwers to 2 decimal places.) FIFO (Periodic) Units Unit Total Beginning Inventory Purchases March 2 June 30 Total Purchases Goods Available for Sale Cost of Goods Sold Units from Beginning Inventory Units from March 2 Purchase Units from June 30 Purchase Total Cost of Goods Sold Ending Inventory d. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 using the Specific identification method. Assume that the April 1 sale was selected one-fifth from the beginning inventory and four-fifths from the purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30. (Round "Cost per Unit" anwers to 2 decimal places.) Show less Specific Identification. (Periodic) Cost per Units Total Unit Beginning Inventory Purchases March 2 June 30 Total Purchases Goods Available for Sale Cost of Goods Sold Units from Beginning Inventory Units from March 2 Purchase Units from June 30 Purchase Total Cont of Goods Sold Ending Inventory of the four methods, which will result in the highest gross profit? Last-in, first-out Weighted average cost First-in, first-out Specific identification Which will result in the lowest income taxes? Last-in, first-out Weighted average cost First-in, first-out Specific identification
