Question

Problem 6-05A a1-a3, b (Part Level Submission) (Video)

You are provided with the following information for Larkspur Inc. for the month ended June 30, 2020. Larkspur uses the periodic method for inventory.

Date				Description		Quantity		Unit Cost or Selling Price
June		1		Beginning inventory		45		$42
June		4		Purchase		136		46
June		10		Sale		113		69
June		11		Sale return		15		69
June		18		Purchase		54		48
June		18		Purchase return		12		48
June		25		Sale		68		74
June		28		Purchase		35		52

Weighted-average cost per unit

$ 46.44

Calculate ending inventory, cost of goods sold, gross profit under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost. (Round average-cost method answers to 2 decimal places, e.g. 1,250.25 and other answers to 0 decimal places, e.g. 1,250. Use weighted-average unit cost rounded to 2 decimal places for computations.)

		LIFO		FIFO		AVERAGE-COST
The ending inventory		$		$		$
The cost of goods sold		$		$		$
Gross profit		$		$		$

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

Answer Firstly we have to calculate the cost of goods available for sale = No. of units * purchase price) = (45*42) + (136*46) + (54*48) - (12*48) + (35*52) = $ 11982 No. of Units in ending inventory = beginning inventory + purchases - sales = 45+ (136+54-12+35) - (113-15+68) 1 =92 Unit 2 Ending Inventory FIFO = = no. of units in ending inventory * Cost as per FIFO 5 = (35*52) + (42*48) + ((92-35-42)*46) 5 = $ 4526

A B D E F 7 3 Ending Inventory LIFO 9 = no. of units in ending inventory * Cost as per FIFO 0 = (45*42) + ((92-45) *46) 1 = $4052 3 Ending inventory average costs 4 = No. of units in ending inventory *average costs 5 = 92 * 46.44 6 = $4272 7 8 LIFO FIFO 9 The Ending Inventory 4052 4526 The Cost of Goods Sold 7930 7456 1 (11982-4052) (11982-4526) 2 Gross Profit 3864 4338 3 ((((113-15) *69)+(68*74))-7930) ((((113-15) *69)+(68*74))-7456) 4 5 Formula 6 Cost of goods sold = cost of goods available for sale - respective ending inventory 7 Gross Profit Net sales - Cost of goods sold AVERAGE 4272 7710 (11982-4272) 4084 (113-15) *69)+(68*74))-7710) 8