Question

in part 3 4. Compute gross profit earned by the company TULLIURE the following calendar-year 2011 Problem 6-2B Alternative cost flows-perpetual Venus Company uses a perpetual inventory system. It entered into the following calendar chases and sales transactions. Units Acquired at Cost Activities Date Units Sold at Retail 600 units @ $55/unit 450 units @ $56/unit 200 units @ $57/unit Required Jan. jan. 10 Feb. 13 Feb. 15 July 21 Aug. 5 Aug. 10 1. For eac 430 units @ $90/unit follow Beginning inventory .. Purchase .. Purchase Sales ... Purchase Purchase Sales Total 230 units @ $58/unit 345 units @ $59/unit 1,825 units 335 units @ $90/unit 765 units Check (3) Ending inventory: FIFO, 561056; WAC, 560,293 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) specific identification-unis sold consist of 600 units from beginning inventory and 165 units from the February 13 purchase, and (c) weighted average cost. (Round per unit costs to three decimals, but inventory balances to the dollar 4. Compute gross profit carned by the company for each of the three costing methods in part 3. Analysis 2. Wha error 3. Expl of e

Answer 1

А в с 1 Solution : 1 Calculation of cost of goods available for sale B = Beginning inventory + cost of goods purchased Beginning inventory 600*55 33,000 $ 450*56 25,200 $ 200*57 11,400 $ Purchases 230*58 13,340 $ 345*59 20,355 $ Total 1,03,295 $ Therefore, Cost of goods available for sale is = $ 103,295 Number of units available for sale Beginning inventory units + purchased inventory units 600 0 Oost Beginning inventory 450 200 Purchases 230 345 Total 1,825 Units Therefore, number of units available for sale is = 1825 units

2 Calculation of number of units in ending inventory Beginning inventory+ Purchases of inventory - Sales of inventory Units Beginning inventory 600 Add 450 200 UU! Purchases 230 Less 345 Sales 430 335 Total 1060 Units Therefore, number of units in ending inventory is = 1060 units

F G O P Q R H K L M N 3 Calculation of cost of ending inventory Beginning inventory+ Purchases of inventory - Sales of inventory FIFO method Since under FIFO method, the older inventory is sold first, the balance inventory is calcaluted at latest prices Rate per unit Units 600 55 450 56 57 200 230 345 1,825 430 Total value 33,000 25,200 11,400 13,340 20,355 1,03,295 23,650 Jan-01 Beginning inventory Jan-10 Feb-13 Purchases Feb-15 Jul-21 Total units available for sale Aug-05 Sales of 430 units from jan 01 Aug-10 Sales of 335 units from jan 01 & Jan 10 170*55 165*56 Cost of goods sold Ending inventory units Balance from jan 10 Feb-13 Feb-15 Jul-21 Ending inventory value by FIFO 170 165 765 1,060 285 9,350 balance out of 600 units in which 430 were sold 9,240 remaining balance out of 335 units sold from feb 13 batch 42,240 200 230 345 1,060 15,960 balance out of 450 units in which 165 were sold 11,400 13,340 20,355 61,055