Question

Greg’s Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the...

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 \$ 205 \$ 4,100 March 5 Sale (\$310 each) 15 March 9 Purchase 10 225 2,250 March 17 Sale (\$360 each) 8 March 22 Purchase 10 235 2,350 March 27 Sale (\$385 each) 12 March 30 Purchase 9 255 2,295 \$ 10,995

rev: 02_28_2017_QC_CS-80932

Required:

1. Calculate ending inventory and cost of goods sold at March 31, using the specific identification method. The March 5 sale consists of bikes from beginning inventory, the March 17 sale consists of bikes from the March 9 purchase, and the March 27 sale consists of four bikes from beginning inventory and eight bikes from the March 22 purchase.

2. Using FIFO, calculate ending inventory and cost of goods sold at March 31.

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

4. Using weighted-average cost, calculate ending inventory and cost of goods sold at March 31.

5. Calculate sales revenue and gross profit under each of the four methods.

6. If Greg’s Bicycle Shop chooses to report inventory using LIFO instead of FIFO, record the LIFO adjustment.

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