Question

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 60 units @ $50.20 per unit Mar. 5 Purchase 205 units @ $55.20 per unit Mar. 9 Sales 220 units @ $85.20 per unit Mar. 18 Purchase 65 units @ $60.20 per unit Mar. 25 Purchase 110 units @ $62.20 per unit Mar. 29 Sales 90 units @ $95.20 per unit Totals 440 units 310 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 45 units from beginning inventory and 175 units from the March 5 purchase; the March 29 sale consisted of 25 units from the March 18 purchase and 65 units from the March 25 purchase. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 45 units from beginning inventory and 175 units from the March 5 purchase; the March 29 sale consisted of 25 units from the March 18 purchase and 65 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

4.Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 45 units from beginning inventory and 175 units from the March 5 purchase; the March 29 sale consisted of 25 units from the March 18 purchase and 65 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

Answer 1

Goods Purchsed Units | Unit Cost Perpetual FIFO Cost of Goods sold Unit Cost Total Cost Units Date Mar-01 Mar-05 Units 60 60 205 205 55.20 265 Mar-09 60 160 220 50.20 55.20 3012 8832 11844 Mar-1865 60.20 45 III Inventory Balance Unit Cost Total Cost 50.20 3012 50.20 3012 55.20 11316 14328 55.20 2484 0 2484 5 5.20 2484 60.20 3913 6397 55.20 2484 60.20 3913 62.20 6842 13239 60.20 1204 62.20 6842 8046 8046 Mar-25 110 62.20 45 65 110 220 20 110 130 130 Mar-29 55.20 60.20 2484 2709 5193 Total 310 17037

Goods Purchased Units Unit Cost Perpetual LIFO Cost of Goods sold Unit Cost Total Cost Units Date Mar-01 Mar-05 Units 60 60 205 55.20 Inventory Balance Unit Cost Total Cost 50.20 3012 50.20 3012 55.20 11316 14328 50.20 2259 Mar-09 205 15 55.20 50.20 11316 753 12069 220 Mar-1865 60.20 50.20 60.20 Mar-25 110 62.20 50.20 60.20 62.20 110 220 2259 2259 3913 6172 2259 3913 6842 13014 2259 3913 1244 7416 7416 Mar-29 90 62.20 5598 65 50.20 60.20 62.20 20 90 130 5598 17667 Total 310 130

Date Mar-01 Mar-05 Weighted Average Inventory Cost method Goods Purchsed Cost of Goods sold Units Unit Cost Units Unit Cost Total Cost Units 60 205 55.20 205 60 220 54.07 11895 Mar-09 Mar-18 65 6 0.20 Inventory Balance Unit Cost Total Cost 50.20 3012 50.20 3012 55.20 11316 54.07 14328 54.07 2433 54.07 2433 60.20 3913 57.69 6346 54.07 60.20 3913 62.20 6842 59.95 13188) 59.95 7793 7793 Mar-25 110 62.20 2433 65 110 220 130 130 90 59.95 5395 Mar-29 Total 380 310 17290

Goods Purchsed Units Unit Cost Specific Identification method Cost of Goods sold Units Unit Cost Total Cost Date Mar-01 Mar-05 205 55.20 Mar-09 45 175 220 50.20 55.20 2259 9660 11919 Mar-1865 60.20 Inventory Balance Units | Unit Cost Total Cost 60 50.20 30121 60 50.20 3012 205 55.20 11316 265 14328 15 50.20 753 55.20 1656 2409 50.20 753 30 55.20 1656 60.20 3913 110 6322 50.20 753 55.20 1656 65 60.20 3913 110 62.20 6842 190 13164 15 50.20 753 30 55.20 1656 60.20 2408 45 62.20 2799 130 7616 130 7616 Mar-25 110 62.20 15 30 Mar-29 25 6 0.20 62.20 1505 4043 90 310 5548 17467 Total

Gross margin Sales Less: Cost of goods sold Gross profit FIFO 27312 17037 10275 LIFO Avg Cost 27312 27312 176671 17290 9645 10022 Spec. ID 27312 17467 9845