Question

Burton Company uses the LIFO perpetual method for financial reporting and tax purposes. A summary of Burton's inventory for the current year is presented below. '(Click the icon to view the inventory transactions.) 5. Read the requirements2. Requirement a. Compute the ending inventory and cost of goods sold for the current year. Begin by preparing Burton Stores' perpetual inventory record under the last-in, first-out (LIFO) method for the year. (When entering the layers for the units sold, enter the first layer sold under LIFO on the first available line, then the next layer sold under LIFO on the next line, and so on. CGS Cost of Goods Sold.) CGS LIFO: Inventory Units Unit Total Units per CGS Balance Unit Cost Sold Cost Purchased Transaction Beg. inventory - Oldest layer Beg. inventory - Next oldest layer Sale February 20 Purchase March 31 Purchase July 15 Sale December 1 and the cost of goods sold Under the LIFO method, Burton Company's total cost of ending inventory is $ for the year is $ Requirement b. Prepare a partial income statement showing the gross profit for the current year. Begin by selecting the labels and enter the amounts to complete the partial income statements. Burton Company Partial Income Statement For the Year Ended (1) |(2) Less: (3) LIFO Inventory Total Cost Unit Sold Units Unit Cost Description Beginning Inventory: January 1 First layer 10,800 $ 3.60 $ 38,880 29,920 6,800 Second layer 4.40 $ 68,800 17,600 Total beginning inventory 13,000 Units sold on February 20 at $7.50 Purchases or Production: 3,300 5.60 18,480 March 31 9,300 55,800 6.00 July 15 16,000 Units sold on December 1 at $7.90 $ 143,080 Cost of goods available for sale 30,200 (29,000) Total units sold 1,200 Ending inventory: December 31

Answer 1

C A E K M 1 LIFO CGS 2 Untis Units Unit Total Inventory 3 per CGS Transaction Purchased Cost Cost Sold unit Balance 4 6 Beg. Inventory Oldest layer $ 3.60 10,800 $38,880.00 6,800 4.40 8 Beg. Inventory Next Oldest layer $29,920.00 $68,800.00 11 Sale February 20 6,800 $ 4.40 6,200 $ 3.60 $52,240.00 $16,560.00 13 16 Purchase March 31 $ $18,480.00 $35,040.00 3,300 5.60 19 Purchase July 1 6.00 $55,800.00 $ $90,840.00 9,300 22 Sale December 1 $ 9,300 6.00 3,300 $ 5.60 24 3.60 $86,520.00 3,400 $ 4,320.00 26 28 and the cost of the goods sold 29 Under the LIFO methos, Burton Company's total cost of ending inventory is 30 for the year is $4,320.00 $138,760.00 31 Burton Company 32 Partial Income Statement 33 For the Yea Ended 34 35 (1) Sales Revenue 36 Less: (2) Cost of Goods Sold 37 (3) Gross Profit $223,900.00 $138,760.00 $ 85,140.00 38 C

JK L A B M C G I N C DE F 1 LIFO CGS 2 Inventory Units Unit Total Untis 3 per Transaction Purchased Cost Cost Sold unit CGS Balance 4 10800 3.6 -C6*E6 6 Beg. Inventory Oldest layer 4.4 6800 C8*ES G6+G8 Beg. Inventory Next Oldest layer 8 6800 4.4 11 Sale February 20 3.6 I11 K11)+(I13*K13) 08-M13 - 13000-6800 13 5.6 3300 -C16 E16 -013+G16 16 Purchase March 31 19 Purchase July 1 9300 C19 E19 O16+G19 9300 22 Sale December 1 6 3300 5.6 24 -019-M26 16000-9300-3300 3.6 (122*K22)+(124 K24)+(126*K26) 26 28 29 Under the LIFO methos, Burton Company's total c0st of ending inventory is 30 for the year is -O26 and the cost of the goods sold M13+M26 31 Burton Company Partial Income Statement 32 33 For the Yea Ended 34 35 (1) Sales Revenue (13000*7.5)+(16000*7.9) 36 Less: (2) Cost of Goods Sold C30 37 (3) Gross Profit -C35-C36