Question

Montoure Company uses a perpetual Inventory system. It entered into the following calendar-year purchases and sales transactions Units sold at Retail Unite Aequired at Cost 680 units 540 per unit 320 units @ $35 per unit 100 units $23 per unit Date Activities Jan. Beginning inventory Feb. 10 Purchase Mar. 13 Purchase Mar. 15 Sales Aug. 21 Purchase Sept. 5 Purchase Sept. 10 Sales Totals 720 unitse $75 per unit 130 units 490 units $45 per unit $41 per unit 620 units 1, 140 units 375 per unit 1,720 units References Required: 1. Compute cost of goods available for sale and the number of units available for sale. Cost of goods available for sale Number of units available for sale units 2. Compute the number of units in ending inventory Erding Inventory units

Answer 1

Requirement 1 Date Activity Jan-01 Beginning Inventory Feb-10 Purchases Mar-13 Purchases Aug-21 Purchases Sep-05 Purchases Number of units per Unit Cost 680 $ 40.00 320 $ 35.00 100 $ 23.00 130 $ 45.00 490 $ 41.00 Total $ $ $ $ $ 27,200.00 11,200.00 2,300.00 5,850.00 20,090.00 $ 66,640.00 Cost of Goods available for sale Number of Units Available for sale 1720 Units Requirement 2 Number of Units Available for sale Less : Number of Units sold Ending Inventory 1720 -1340 380 Units

Requirement 3 Perpetual FIFO : Goods Purchased Date Cost per Unit No of Units Jan-01 Cost of goods sold Inventory Balance No of Units sold Cost per Unit Cost of goods sold No of Units Cost per Unit Inventory Balance 680 $ 40,00 $ 27,200.00 Feb-10 320 35 680 320 $ $ 40.00 35.00 $ $ 27,200.00 11,200.00 Mar-13 100 680 $ 320 $ 100 $ 40,00 35,00 23,00 $ $ $ 27,200,00 11,200,00 2,300,00 Mar-15 680 $ 40 $ 40.00 35.00 27,200.00 1,400.00 280 $ 100 $ 35.00 23.00 $ $ 9,800.00 2,300.00 Aug-21 130 280 $ 100 $ 130 $ 35.00 23.00 45,00 $ $ $ 9,800.00 2,300,00 5,850,00 Sep-05 490 280 $ 100 $ 130 $ 490 $ 35.00 23.00 45.00 41,00 $ $ $ $ 9,800.00 2,300.00 5,850.00 20,090,00 380 $ 41.00 15,580.00 Sep-10 280 $ 100 $ 130 $ 110 $ 35,00 23.00 45.00 41.00 $ $ $ $ 9,800.00 2,300.00 5,850,00 4,510.00 1340 $ 51,060,00 380 $ 15,580,00 Perpetual LIFO : Goods Purchased Date Cost per Unit No of Units Jan-01 Cost of goods sold Inventory Balance No of Units sold cost per Unit Cost of goods sold No of Units Cost per Unit Inventory Balance 680 $ 40.00 $ 27,200.00 Feb-10 320 680 $ 320 $ 40,00 35.00 $ $ 27,200.00 11,200.00 Mar-13 100 680 $ 320 $ 100 $ 40,00 35.00 23.00 $ $ $ 27,200.00 11,200.00 2,300,00 Mar-15 380 $ 40.00 $ 15,200.00 100 $ 320 $ 300 $ 23.00 35.00 40,00 2,300.00 11,200,00 12,000.00 Aug-21 130 45 380 130 $ $ 40.00 45,00 $ $ 15,200.00 5,850,00 Sep-05 490 380 $ 130 $ 490 $ 40.00 45,00 41.00 $ $ $ 15,200.00 5,850,00 20,090,00 Sep-10 41,00 45,00 380 $ 490 130 $ $ 40,00 $ $ 15,200,00 20,090,00 5,850,00 1340 $ 51,440.00 380 $ 15,200.00

Weighted Average Goods Purchased Date Cost of goods sold No of Units sold Cost per Unit Cost per Unit No of Units Jan-01 Inventory Balance Cost of goods sold No of Units Cost per Unit Inventory Balance 680 $ 40,00 $ 27,200,00 Feb-10 680 $ 320 $ 1000$ 40,00 35.00 38.40 $ $ $ 27,200.00 11,200.00 38,400.00 Mar-13 1000 $ 100 $ 1100$ 38.40 23,00 37.00 $ $ $ 38,400.00 2,300.00 40,700.00 Mar-15 720 $ 37.00 26,640.00 380 $ 37.00 $ 14,060,00 Aug-21 130 380 $ 130 $ 510'$ 37.00 45,00 39.04 $ $ $ 14,060,00 5,850,00 19,910,00 Sep-05 490 510 $ 490 $ 1000$ 39.04 41,00 40,00 $ $ $ 19.910.00 20,090.00 40,000.00 Sep-10 620 $ 40,00 $ 24,800.00 380 $ 40,00 15,200.00 1340 $ 51,440.00 380 $ 15,200.00 Specific Identification Goods Purchased Date No of Unite Cost per Unit Cost of goods sold Inventory Balance No of Units sold Cost per Unit Cost of goods sold No of Units Cost per Unit Inventory Balance 680 $ 40,00 $ 27,200.00 Jan-01 Feb-10 320 680 $ 320 $ 40.00 35.00 $ $ 27,200.00 11,200.00 Mar-13 100 23 680 $ 320 $ 100 $ 40,00 35.00 23,00 $ $ $ 27,200.00 11,200.00 2,300.00 Mar-15 680 $ 40 $ 40.00 35.00 27,200.00 1,400.00 280 $ 100 $ 35.00 23,00 $ $ 9,800.00 2,300.00 Aug-21 130 280 $ 100 $ 130 $ 35.00 23.00 45,00 $ $ $ 9,800.00 2,300.00 5,850.00 Sep-05 490 280 $ 100 $ 130 $ 490 $ 35,00 23,00 45,00 41,00 $ $ $ $ 9,800.00 2,300,00 5,850,00 20,090,00 3,280,00 Sep-10 50 200 $ 100 $ 80 $ 240 $ 35.00 23.00 45.00 41.00 $ $ $ $ 7,000.00 2,300,00 3,600,00 9,840.00 250 1340 51,340.00 380 $ 3,280.00 Note: In The question it is given that number of units sold is 1340 total, But while mentioning specifically for this method total number of units sold resulting in 1360 units so there is some mistake in question, for the time being i have done solution by taking 240 units instead of 260 units sold for sep 10th sale please comment if there is any correction, i'll update the solution if question was rectified.

Requirement 4 FIFO Sales Less: Cost of goods sold $ Gross profit LIFO Weight Avg Spec Identification 1,00,500.00 $ 1,00,500.00 $ 1,00,500.00 $ 1,00,500.00 (51,060,00) $ (51,440.00) $ (51,440.00) $ (51,340.00) 49,440.00 49,060,00 49,060,00 49,160.00 Requirement 5 FIFO Method Results in Higher Gross profit