Question

Part 3 Aranas Manufacturing, a tool retailer, began year 20x7 with 21,500 units of product in its January 1 inventory, at a cost of $12.50 for each unit. It made successive purchases of its product in year 20x7, as follows. The company uses a periodic inventory system. On December 31, 20x7, a physical count reveals that 35,000 units of its product remain in inventory Mar. 7 25,000 units @ $16 each May 25 41,500 units @ $19 each Aug. 1 22,750 units @ $23 each Nov. 10 38,100 units @ $24 each Instructions Using the template provided below. 1. Compute the number and total cost of the units available for sale in year 20x7. 2. Compute the amounts assigned to the 20x7 ending inventory, and the cost of goods sold for FIFO, LIFO, and weighted average. 3. The 113,850 units sold are $31 each. Prepare comparative income statements for the three inventory costing! methods of FIFO, LIFO, and weighted average, which include a detailed cost of goods sold section as part of each statement. (Round your average cost per unit to 2 decimal places.)

Answer 1

Aranas Manufacturing Periodic Inventory Calculation 12.50 Total $ 268,750 Decription Units Cost Beginning 21,500 $ Purchase 7-Mar 25,000 $ 25-May 41,500 $ 1-Aug 22,750 $ 10-Nov 38,100 $ Units available for sa 148,850 16.00 19.00 23.00 24.00 $ 400,000 $ 788,500 $ 523,250 $ 914,400 $ 2,894,900 LIFO Weighted Average Ending units 35,000 21,500 13,500 35,000 Ending Inventory Unit Cost FIFO $ 24.00 $ 840,000 $ 12.50 $ 16.00 $ 19.45 $ 840,000 $ 268,750 $ 216,000 $ =2,894,900/148,850= $19.45 680,750 680,750 $484,750 $ Comparative Income Statement FIFO Weighted Average Sales $3,529,350 $3,529,350 $ 3,529,350 =113,850*31 Cost of goods sold $2,054,900 $2,410,150 $ 2,214,150 =2,894,900-840,000 Gross Profit $1,474,450 $1,119,200 $ 1,315,200 Units avail for sale - Ending Inv