Question

Problem 4.3 Baseball Equipment, Inc. sells several lines of baseball equipment including baseball gloves. The following information is available on the purchase and sale of one line of baseball gloves during the year ended December 31, 20X7: # of Gloves Cost/glove Total Cost 1/1/X7 Beginning inventory 100 $33 $3,300 Purchases: $35 $1,400 March 5, 20X7 April 1, 20X7 .......... $36 $2,160 July 11, 20X7 $38 $1,900 September 16, 20X7 ..... $39 $2,730 $41 $3,280 December 1, 20X7......... December 15, 20X7 ............ $43 $215 Total available for sale ............. 405 $14,985 Sales during 20X7 ................... 12/31/X7 Ending inventory 110 The selling price per glove was $65. On May 1, 20X7, 190 gloves were sold. On December 2, 20X7,105 gloves were sold. 295 Baseball Equipment, Inc. uses a periodic inventory system. a) Compute the cost of goods sold during 20X7 and the December 31, 20X7 inventory balance under each of the following cost flow assumptions: 1) Last-in, first-out (LIFO). 2) First-in, first-out (FIFO). 3) Weighted average. b) Determine gross profit under each of the following cost flow assumptions: 1) Last-in, first-out (LIFO). 2) First-in, first-out (FIFO). 3) Weighted average.

Answer 1

Baseball Equipment inc. FIFO Periodic Sales Selling price Total Cost Date Units Goods Available for Sale 1-May 190 65 12350 2-Dec 105 65 6825 Date Units unit cost Total Cost 295 19175 1-Jan 100 33 3300 1400 FIFO Periodic 5-Mar 40 35 2160 1-Apr 60 36 11-Jul Selling price Total Cost 50 38 1900 Date Units 16-Sep 70 39 2730 1-May 190 65 12350 1-Dec 80 41 3280 2-Dec 105 65 6825 15-Dec 5 43 215 295 19175 405 14985 COGS -10515 Clos stk Gross Profit 8660 -110 -4470 10515 295 COGS LIFO Periodic Closing Stock Date Units Selling price Total Cost Date Units unit cost Total Cost 15-Dec 12350 5 43 215 1-May 190 65 3280 2-Dec 1-Dec 80 41 105 65 6825 16-Sep 25 39 975 295 19175 110 4470 COGS -11335 Gross Profit 7840 LIFO Periodic Weighted Average Goods Available for Sale Selling price Total Cost Date Units Date Units unit cost Total Cost 1-May 190 65 12350 1-Jan 100 33 3300 2-Dec 105 65 6825 5-Mar 40 35 1400 295 19175 COGS 2160 1-Apr 60 36 -10915 11-Jul 1900 Gross Profit 50 38 8260 16-Sep 70 39 2730 3280 1-Dec 80 41 15-Dec 5 43 215 405 14985 Clos stk -3650 -110 295 COGS 11335 closing Stock unit cost Total Cost Date Units 1-Jan 100 33 3300 5-Mar 10 35 350 110 3650 Weighted Average Goods Available for Sale unit cost Total Cost Date Units 100 1-Jan 33 3300 1400 5-Mar 40 35 1-Apr 60 36 2160 11-Jul 50 38 1900 16-Sep 70 39 2730 1-Dec 80 41 3280 15-Dec 5 43 215 405 37 14985 Clos stk -110 -4070 10915 295 COGS Closing Stock Date unit cost Total Cost Units 4070 110 37 110 4070