(answered) – 1. Compute costs of goods available for sale and the number of
(answered) – 1. Compute costs of goods available for sale and the number of
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The Question
1. Compute costs of goods available for sale and the number of units available for sale.
2. Compute the number of units in ending inventory.
3. Compute cost assigned to ending inventory using FIFO, LIFO, weighted average, and specific identification
4. Compute gross profit earned by the company for each oft he the four cost methods.
PRINCIPLES OF ACCOUNTING I
Harry?s House of Fashions uses a perpetual inventory system. It entered into the following calendar-year 2013 purchases and sales
transactions:
Jan. 1
Beginning inventory
620 units @ $45/unit
February 10
Purchase
310 units @ $42/unit
March 13
Purchase
120 units @ $30/unit
March 15
Sales
770 units @ $85/unit
August 21
Purchase
190 units @ $50/unit
Sept. 5
Purchase
520 units @ $48
Sept. 10
Sales
710 units @ $85
Totals
1760 units
1480 units
Required
1. Compute cost of goods available for sale and the number of units available for sale.
2. Compute the number of units remaining in ending inventory.
3. Compute the cost of goods sold for the year and the cost assigned to ending inventory using (a) FIFO, (b) LIFO, and
(c) weighted average ? round per unit cost to tenth of a cent and inventory balances to the dollar.
4. Compute the gross profit earned by the company for each of the costing methods in part 3.
1
Calculate cost of goods available for sale and number of units available for sale:
3a
FIFO Method:
Date
1/1
2
Compute the gross profit earned under each of the three methods:
Inventory Balance
Units
Unit Cost
Total
Compute the number of units in ending inventory:
4
Cost of Goods Sold
Units
Unit Cost
Total
FIFO
Sales
Cost of Goods Sold
Gross Profit
LIFO
Total Cost of Goods Sold
Ending Inventory
Weighted
Average Specific Identification
3b
LIFO Method:
Date
1/1
Cost of Goods Sold
Units
Unit Cost
Total
Inventory Balance
Units
Unit Cost
Total
Total Cost of Goods Sold
Ending Inventory
3c
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