Question

Warnerwoods Company uses a periodic inventory system. It entered into the following purchases and sales transactions for March Date Units Sold at Retail Units Acquired at Cost 135 units @ $70 per unit 435 units @ $75 per unit 455 units @ $105 per unit Activities Mar. 1 Beginning inventory Mar. 5 Purchase Mar. 9 Sales Mar. 18 Purchase Mar. 25 Purchase Mar. 29 Sales Totals 190 units @ $80 per unit 270 units @ $82 per unit 230 units @ $115 per unit 685 units 1,030 units For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 375 units from the March purchase; the March 29 sale consisted of 75 units from the March 18 purchase and 155 units from the March 25 purchas 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. Complete this question by entering your answers in the tabs below. Periodic FIFO Periodic LIFO Weighted Average Specific Id Compute the cost assigned to ending inventory using FIFO. a) Periodic FIFO Cost of Goods Available for Sale Cost of Goods Sold Ending Inventory Cost of Cost per unit units Cost per # of units sold Available for Sale Cost of Goods Sold # of units in ending inventory Cost per unit unit Ending Inventory Beginning inventory Purchases: March 5 March 18 March 25 Total

Answer 1

Ans. 3
Ans. A	FIFO:	Cost of goods available for sale			Cost of goods sold			Ending inventory
		# of Units	Cost per	Cost of goods	# of units	Cost per	Cost of	# of Units in	Cost per	Ending
			Unit	Available for sale	Sold	Unit	Goods sold	Ending inventory	Unit	Inventory
	Beginning inventory	135	$70.00	$9,450	135	$70.00	$9,450	0	$70.00	$0
	Purchases:							0
	05-Mar	435	$75.00	$32,625	435	$75.00	$32,625		$75.00
	18-Mar	190	$80.00	$15,200	115	$80.00	$9,200	75	$80.00	$6,000
	25-Mar	270	$82.00	$22,140	0	$82.00	$0	270	$82.00	$22,140
	Total	1030		$79,415	685		$51,275	345		$28,140
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.
Ans. B	LIFO:	Cost of goods available for sale			Cost of goods sold			Ending inventory
		# of Units	Cost per	Cost of goods	# of units	Cost per	Cost of	# of Units in	Cost per	Ending
			Unit	Available for sale	Sold	Unit	Goods sold	Ending inventory	Unit	Inventory
	Beginning inventory	135	$70.00	$9,450	0	$70.00	$0	135	$70.00	$9,450
	Purchases:
	05-Mar	435	$75.00	$32,625	225	$75.00	$16,875	210	$75.00	$15,750
	18-Mar	190	$80.00	$15,200	190	$80.00	$15,200	0	$80.00	$0
	25-Mar	270	$82.00	$22,140	270	$82.00	$22,140		$82.00
	Total	1030		$79,415	685		$54,215	345		$25,200
	*In LIFO method the units that have purchased last, are released the first one and ending inventory units
	remain from the first purchase.
Ans. C	Average cost:	Cost of goods available for sale			Cost of goods sold			Ending inventory
		# of Units	Cost per	Cost of goods	# of units	Cost per	Cost of	# of Units in	Cost per	Ending
			Unit	Available for sale	Sold	Unit	Goods sold	Ending inventory	Unit	Inventory
	Beginning inventory	135	$70.00	$9,450
	Purchases:
	05-Mar	435	$75.00	$32,625
	18-Mar	190	$80.00	$15,200
	25-Mar	270	$82.00	$22,140
	Total	1030		$79,415	685	$77.10	$52,815	345	$77.10	$26,600
	Average cost per unit =   Total cost of goods available for sale / Units available for sale
	$79,415 / 1,030
	$77.10	per unit

Ans. D Specific identification Cost of goods available for sale # of Units Cost per Cost of goods Unit Available for sale 135 $70.00 $9,450 # of units Sold 80 Cost of goods sold Cost per Unit $70.00 Cost of Goods sold $5,600 # of Units in Ending inventory Ending inventory Cost per Unit $70.00 Ending Inventory $3,850 Beginning inventory Purchases: 05-Mar 18-Mar 25-Mar Total 435 190 270 1030 $75.00 $80.00 $82.00 $32,625 $15,200 $22,140 $79,415 375 75 155 685 $75.00 $80.00 $82.00 $28,125 $6,000 $12,710 $52,435 60 115 115 345 $75.00 $80.00 $82.00 $4,500 $9,200 $9,430 $26,980 Ending inventory units = Total units available - Total units sold Sold units (b) 80 Purchase date 01-Mar 05-Mar 18-Mar 25-Mar Units available (a) 135 435 190 270 375 75 155 Ending inventory (a-b) 55 60 115 115 Ans. 4 Sales (-) Cost of goods sold Gross margin FIFO $74,225 $51,275 $22,950 LIFO $ 74,225 -$54,215 $20,010 Weighted average $74,225 $52,815 $21,410 Specific identification $74,225 -$52,435 $21,790 *Calculation of sales: Date 09-Mar 29-Mar Total sales Units 455 230 Rate $105.00 $115.00 Cost $47,775 $26,450 $74,225