Question

Required information (The following information applies to the questions displayed below.) Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions for March Units Sold at Retail Units Acquired at Cost 100 units @ $50.00 per unit 400 units @ $55.00 per unit 420 units @ $85.00 per unit Date Activities Mar. 1 Beginning inventory Mar. 5 Purchase Mar. 9 Sales Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales Totals 120 units @ $60.00 per unit 200 units @ $62.00 per unit 160 units @ $95.00 per unit 580 units 820 units For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 340 units from the March 5 purchase; the March 29 sale consisted of 40 units from the March 18 purchase and 120 units from the March 25 purchase. 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 and final answers to nearest whole dollar.) FIFO LIFO Weighted Average $ 50,900 $ $ 50,900 Sales Less: Cost of goods sold Gross profit 50,900 31,800 19,100 Specific Identification $ 50,900 32,540 $ 18,360 $ $ 50,900 $ 50,900

Answer 1

FIFO Cost of goods Available for sale cost of Goods sold Ending Inventory Cost of No of units Cost per unit No of units Cost per unit) Cost of goods s Available for sale 100 50.00 5000 No of units Cost per unit 100 50.00 Inventory goods sold 5000 400 Beginning inventory Purchases: Mar-05 Mar-18 Mar-25 Total 55.00 60.00 80 400 120 200 820 22000 4800 22000 7200 12400 46600 55.00 60.000 62.00 40 200 240 60.00 62.00 2400 12400 62.00 580 31800 14800 Sales Less: cost of goods sold Gross profit 50900 31800 19100

LIFO Cost of goods Available for sale No of units Cost per unit it Cost of goods COS Available for sale 100 50.00 5000 Cost of Goods sold No of units Cost per unit Cost of goods sold 0 Ending Inventory No of units Cost per unit) E Ending Inventory 100 50 5000 400 140 55 7700 Beginning inventory Purchases: Mar-05 Mar-18 Mar-25 Total 120 55.00 60.00 62.00 22000 7200 12400 46600 260 120 200 14300 7200 12400 33900 200 820 580 240 12700 Sales 50900 33900 Less: cost of goods sold Gross profit 17000

Weighted average method Cost of goods Available for sale Cost of Goods sold Ending Inventory No of units Cost per unit No of units Cost per unit cost of goods Available for sale 100 50.00 5000 No of units Cost per unit cost of | goods sold Ending Inventory Beginning inventory Purchases: Mar-05 Mar-18 Mar-25 Total 400 120 200 8201 55.00 60.00 62.00 56.83 22000 7200 12400 46600 580 56.83 32961 240 56.83 13639 Sales Less: cost of goods sold Gross profit 50900 32961 17939

Specific Identification Method Ending Inventory Cost of goods Available for sale No of units Cost per unit Cost of goods Available for sale 100 50.00 5000 Cost of Goods sold No of units Cost per unit Cost of goods sold 80 50.00 4000 No of units Cost per unit Ending Inventory 1000 20 50.00 400 340 601 Beginning inventory Purchases: Mar-05 Mar-18 Mar-25 Total 120 55.00 60.00 62.00 40 220001 7200 12400 46600 55.00 60.00 62.00 18700 2400 7440 32540 55.00 60.00 62.00 3300 4800 4960 14060 200 820 120 580 240 Sales Less: cost of goods sold Gross profit 50900 32540 18360