Question

# Required information [The following information applies to the questions displayed below.] Greg’s Bicycle Shop has the...

Required information

[The following information applies to the questions displayed below.]

Greg’s Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. Greg's Bicycle Shop uses a periodic inventory system.

 Date Transactions Units Unit Cost Total Cost March 1 Beginning inventory 20 \$ 180 \$ 3,600 March 5 Sale (\$260 each) 15 March 9 Purchase 10 200 2,000 March 17 Sale (\$310 each) 8 March 22 Purchase 10 210 2,100 March 27 Sale (\$335 each) 12 March 30 Purchase 7 230 1,610 \$ 9,310

rev: 02_28_2017_QC_CS-80932

3. Using LIFO, calculate ending inventory and cost of goods sold at March 31.

Under LIFO method goods purchase last are sold first

Cost of goods sold

= March 5 sale will be from beginning inventory + March 17 sale will be from March 9 purchase + March 22 sale will be from 10 units from March 22 and 2 units from March 9 purchase

Cost of goods sold = 15*180 + 10*200 + 10*210 =

= 2700 + 2000 + 2100

= \$6,800

Closing inventory will be beginning inventory of 5 units and 7 units from purchase on March 30

Valuation will be

= 5*180 + 7*230

= 900 + 1610

= \$2,510