Instructions The beginning inventory at Funky Party Supplies and data on purchas
ID: 2446169 • Letter: I
Question
Instructions
The beginning inventory at Funky Party Supplies and data on purchases and sales for a three-month period ending March 31, 2016, are as follows:
Date
Compare the gross profit and the March 31, 2016, inventories.
FIFO
1. Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
LIFO
2. Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
Weighted Avarage
3. Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Round the weighted average unit cost to the nearest cent.
4. Compare the gross profit and the March 31, 2016, inventories, using the following column headings.
1
FIFO
LIFO
Weighted Average
2
Sales
3
Cost of merchandise sold
4
Gross profit
5
6
Inventory, March 31, 2016
Date
Transaction Number of Units Per Unit Total Jan. 1 Inventory 2,500 $60.00 $150,000 10 Purchase 7,500 68.00 510,000 28 Sale 3,750 120.00 450,000 30 Sale 1,250 120.00 150,000 Feb. 5 Sale 500 120.00 60,000 10 Purchase 18,000 70.00 1,260,000 16 Sale 9,000 125.00 1,125,000 28 Sale 8,500 125.00 1,062,500 Mar. 5 Purchase 15,000 71.60 1,074,000 14 Sale 10,000 125.00 1,250,000 25 Purchase 2,500 72.00 180,000 30 Sale 8,750 125.00 1,093,750Explanation / Answer
1. Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system.
Closing Stock = 269500 (89500 + 180000)
Cost of goods sold = 150,000+85000+85000+34000+306000+315000+595000+350000+360000+630000 = 2910,000
2. Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.
Closing Stock = 548500
Cost of Goods Sold = 2631500
3. Determine the inventory on March 31, 2016, and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system. Round the weighted average unit cost to the nearest cent.
Closing Stock = 260000
Cost of Goods Sold = 2914000
Date Purchase Receipts Issue Balance Unit Rate Amount Unit Rate Amount Unit Rate Amount 01-Jan Opening Inventory 2,500 60 1,50,000 10-Jan Purchases 7,500 68 5,10,000 2,500 60 1,50,000 7,500 68 5,10,000 28-Jan Sale 2,500 60 1,50,000 6,250 68 4,25,000 1,250 68 85,000 30-Jan Sale 1,250 68 85,000 5,000 68 3,40,000 05-Feb Sale 500 68 34,000 4,500 68 3,06,000 10-Feb Purchases 18,000 70 12,60,000 4,500 68 3,06,000 18,000 70 12,60,000 16-Feb Sale 4,500 68 3,06,000 13,500 70 9,45,000 4,500 70 3,15,000 28-Feb Sale 8,500 70 5,95,000 5,000 70 3,50,000 05-Mar Purchases 15,000 72 10,74,000 5,000 70 3,50,000 15,000 72 10,74,000 14-Mar Sale 5,000 70 3,50,000 10,000 72 7,16,000 5,000 72 3,60,000 25-Mar Purchases 2,500 72 1,80,000 10,000 72 7,16,000 2,500 72 1,80,000 30-Mar Sales 8,750 72 6,30,000 1,250 72 89,500 2,500 72 1,80,000