Topanga Group began operations early in 2021. Inventory purchase information for the quarter ended March 31, 2021, for Topanga's only product is provided below. The unit costs include the cost of freight. The company uses a periodic inventory system to report inventory and cost of goods sold. Date of Purchase Jan. 7 Feb. 16 March 22 Totals Units 7,000 16,000 20,000 43,000 Unit Cost $4.00 5.00 6.00 Total Cost $ 28,000 80,000 120,000 $228,000 Sales for the quarter, all at $9 per unit, totaled 25,000 units leaving 18,000 units on hand at the end of the quarter. Required: 1. Calculate Topanga's cost of goods sold for the first quarter using: a. FIFO b. LIFO C. Average cost 2. Calculate Topanga's gross profit ratio for the first quarter using FIFO, LIFO, and Average cost. 3. Comment on the relative effect of each of the three inventory methods on the gross profit ratio. Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Req 1C Req 2 Req3 Calculate Topanga's cost of goods sold for the first quarter using FIFO. FIFO: Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Cost per Cost of Goods # of units Cost per Cost of # of units Available for unit sold unit Sale Goods Sold 0 0 $ 0.00 $ Ending Inventory - Periodic FIFO # of units Cost per Ending in ending unit Inventory inventory $ 0.00 $ $ 0 0 0 $ 4.00 0 4.00 0 Beginning Inventory Purchases: January 7 February 16 March 22 Total $ $ $ 5.00 0 0 7,000 $ 4.00 16,000 $ 5.00 20,000 $ 6.00 43,000 28,000 80,000 120,000 228,000 5.00 6.00 $ 6.00 0 $ 0 0 $ $ 0 $ 0 0 $ 0 Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 2 Req3 Calculate Topanga's cost of goods sold for the first quarter using LIFO. LIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO Cost per Cost of Goods Cost per # of units Cost of # of units Available for unit unit Goods Sold Sale $ $ 0.00 $ 0 Ending Inventory - Periodic LIFO # of units Cost per Ending in ending unit Inventory inventory $ 0.00 $ sold 0 $ 0 4.00 0 4.00 0 Beginning Inventory Purchases: January 7 February 16 March 22 Total 5.00 0 $ $ $ $ 5.00 7,000 $ 4.00 16,000 $ 5.00 20,000 $ 6.00 43,000 0 28,000 80,000 120,000 228,000 $ $ 6.00 0 $ 6.00 0 $ 0 $ $ 0 0 $ 0 Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 2 Req3 Calculate Topanga's cost of goods sold for the first quarter using average cost. (Round average cost per unit to 4 decimal places.) Average Cost Cost of Goods Available for Sale Cost of Goods Sold - Average Cost Unit Cost of Goods # of units Average Available for # of units Cost of Cost per Cost Goods Sold sold Sale Unit Ending Inventory - Average Cost # of units Average in ending Ending Cost per Inventory inventory unit $ Beginning Inventory Purchases: January 7 February 16 March 22 Total 7,000 $ 4.00 16,000 $ 5.00 20,000 $ 6.00 43,000 28,000 80,000 120,000 228,000 $ $ 0 Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Reg 2 Req3 Calculate Topanga's gross profit ratio for the first quarter using FIFO, LIFO, and Average cost. Choose Numerator: Choose Denominator: FIFO LIFO Average cost Gross Profit Ratio Gross profit ratio 0 0 0 |--| ++ Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 1C Req 2 Req3 Comment on the relative effect of each of the three inventory methods on the gross profit ratio. In situations when costs are rising, LIFO results in a cost of goods sold and therefore, a gross profit ratio than FIFO.
