Question

The Baby Store had a beginning inventory on January 1 of 290 full-size strollers at a cost of $190 per unit. During the year, the following purchases were made:

		Units		Unit Cost
Mar. 15		82		$191
July 20		58		190
Sept. 4		24		188
Dec. 2		10		183

At the end of the year, there were 34 units on hand. The Baby Store uses a periodic inventory system.

Determine the cost of goods available for sale.

Cost of goods available for sale

$

  

  

During the year, The Baby Store sold the strollers for $310 per unit. Calculate the number of units sold during the year and total sales revenue.

Number of units sold			units
Sales revenue		$

  

  

Determine the cost of the ending inventory and the cost of goods sold using (1) FIFO and (2) weighted average. (Round the weighted average cost per unit to two decimal places and final answers to 0 decimal places, e.g. 5,275.)

		FIFO		Weighted average
Cost of goods sold		$		$
Ending inventory		$		$

  

  

Calculate gross profit using (1) FIFO and (2) weighted average. (Round answers to 0 decimal places, e.g. 5,275.)

		FIFO		Weighted average
Gross profit		$		$

Answer 1

Calculate following

	Unit	Unit Cost	Total cost
Beginning Inv	290	190	55100
Purchase 1	82	191	15662
Purchase 2	58	190	11020
Purchase 3	24	188	4512
Purchase 4	10	183	1830
Total	464		88124

a) Cost of goods available for sale = $88124

b) Number of units sold = 464-34 = 430 Units

Sales revenue = 430*310 = $133300

c) Calculate following

	FIFO	Weighted average
Cost of goods sold	88124-6342 = 81782	88124-6457 = 81667
Ending inventory	4512+1830 = 6342	189.92*34 = 6457

d) Gross profit

	FIFO	Weighted average
Gross profit	133300-81782 = 51518	51633