Question

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.

Answer 1