Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 200 units @ $53.00 per unit
Mar. 5 Purchase 275 units @ $58.00 per unit
Mar. 9 Sales 360 units @ $88.00 per unit
Mar. 18 Purchase 135 units @ $63.00 per unit
Mar. 25 Purchase 250 units @ $65.00 per unit
Mar. 29 Sales 230 units @ $98.00 per unit
Totals 860 units 590 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, the March 9 sale consisted of 115 units from beginning inventory and 245 units from the March 5 purchase; the March 29 sale consisted of 95 units from the March 18 purchase and 135 units from the March 25 purchase.

4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 115 units from beginning inventory and 245 units from the March 5 purchase; the March 29 sale consisted of 95 units from the March 18 purchase and 135 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

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

Students also viewed these Accounting questions