Question

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Beginning inventory 240 units @ $53.80 per unit Mar. 5 Purchase 295 units @ $58.80 per unit Mar. 9 Sales 400 units @ $88.80 per unit Mar. 18 Purchase 155 units @ $63.80 per unit Mar. 25 Purchase 290 units @ $65.80 per unit Mar. 29 Sales 270 units @ $98.80 per unit Totals 980 units 670 units 4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 135 units from beginning inventory and 265 units from the March 5 purchase; the March 29 sale consisted of 115 units from the March 18 purchase and 155 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

complete this assigned to ending invventory using FIFO

Perpetual LIFO

Weighted Average

Specifi ID

Answer 1

Workings:

	FIFO	LIFO	Weighted Average	Specific Identification
Sales	$ 62,196	$ 62,196	$ 62,196	$ 62,196
Less: Cost of Goods Sold	38,871	40,761	39,666	40,381
Gross Profit	$ 23,325	$ 21,435	$ 22,530	$ 21,815

1. Perpetual FIFO :

	Purchases			Cost of Goods Sold			Inventory on Hand
Date	Units	Unit Cost	Amount	Units	Unit Cost	Amount	Units	Unit Cost	Amount
Mar 1							240	$ 53.80	$12,912
5	295	$ 58.80	17,346				240 295	53.80 58.80	12,912 17,346
9				240 160	53.80 58.80	12,912 9,408	135	58.80	7,938
18	155	63.80	9,889				135 155	58.80 63.80	7,938 9,889
25	290	65.80	19,082				135 155 290	58.80 63.80 65.80	7,938 9,889 19,082
29				135 135	58.80 63.80	7,938 8,613	20 290	63.80 65.80	1,276 19,082
Totals	740		46,317	670		38,871	310		20,358

2. Perpetual LIFO :

	Purchases			Cost of Goods Sold			Inventory on Hand
Date	Units	Unit Cost	Amount	Units	Unit Cost	Amount	Units	Unit Cost	Amount
Mar 1							240	$ 53.80	$12,912
5	295	$ 58.80	$17,346				240 295	53.80 58.80	12,912 17,346
9				295 105	58.80 53.80	17,346 5,649	135	53.80	7,263
18	155	63.80	9,889				135 155	53.80 63.80	7,263 9,889
25	290	65.80	19,082				135 155 290	53.80 63.80 65.80	7,263 9,889 19,082
29				270	65.80	17,766	135 155 20	53.80 63.80 65.80	7,263 9,889 1,316
Totals	740		46,317	670		40,761	310		18,468

3. Weighted Average :

	Purchases			Cost of Goods Sold			Inventory on Hand
Date	Units	Unit Cost	Amount	Units	Unit Cost	Amount	Units	Unit Cost	Amount
Mar 1							240	$ 53.80	$12,912
5	295	$ 58.80	$17,346				240 295	53.80 58.80	12,912 17,346
							535	56.56	30,258
9				400	56.56	22,624	135	56.56	7,636
18	155	63.80	9,889				135 155	56.56 63.80	7,636 9,889
							290	60.43	17,525
25	290	65.80	19,082				290 290	60.43 65.80	17,525 19,082
							580	63.12	36,607
29				270	63.12	17,042	310	63.12	19,567
Totals	740		46,317	670		39,666	310	63.12	19,563

4. Specific Identification :

	Purchases			Cost of Goods Sold			Inventory on Hand
Date	Units	Unit Cost	Amount	Units	Unit Cost	Amount	Units	Unit Cost	Amount
Mar 1							240	$ 53.80	$12,912
5	295	$ 58.80	$17,346				240 295	53.80 58.80	12,912 17,346
9				135 265	53.80 58.80	7,263 15,582	105 30	53.80 58.80	5,649 1,764
18	155	63.80	9,889				105 30 155	53.80 58.80 63.80	5,649 1,764 9,889
25	290	65.80	19,082				105 30 155 290	53.80 58.80 63.80 65.80	5,649 1,764 9,889 19,082
29				115 155	63.80 65.80	7,337 10,199	105 30 40 135	53.80 58.80 63.80 65.80	5,649 1,764 2,552 8,883
	740		46,317	670		40,381	310		18,848