During July 2014, Micanopy, sold 500 units of its productsEmpire for $8,000. The following units were available.
Units Cost
BeginningInventory 200 $2
Purchase1 80 $4
Purchase2 120 $6
Purchase3 300 $9
Purchase4 180 $12
A sale of 500 units was made after purchase 3. Of the unitssold, 200 came from beginning inventory and 300 came from purchase3.
Determine the costs of goods available for sale and endinginventory in units. Then determine the costs that should beassigned to cost of goods sold and ending inventory under ach ofthe following assumptions. (For each alternative, show the grossmargin. Round unit costs to cents and totals to dollars.)
Costs are assigned under the periodic inventory system using a.)the specific identification method, b) the average-cost method, c.)FIFO method and d.) LIFO method
Costs are assigned under the perpetual inventory system usinga.) the average-cost method, b.) the FIFO method, and c) the LIFOmethod
E7A. Periodic and PerpetualSystems and Inventory Costing Methods
Cost of goods available forsale and ending inventory in units
Units
Cost
Total
Beginninginventory
200
$ 2
$ 400
Purchase 1
80
4
320
Purchase 2
120
6
720
Purchase 3
300
9
2,700
Purchase 4
180
12
2,160
Cost of goods available forsale
880
$6,300
Sale in units
500
Ending inventory inunits
380
1.
Periodic inventorysystem
a.
Specific identificationmethod:
Sales
$8,000
Cost of goods available forsale
Less endinginventory*
Cost of goodssold
Gross margin
$4,900
*
Purchase 1
80
units
During July 2014, Micanopy, sold 500 units of its productsEmpire for $8,000. The following units were available.
Units Cost
BeginningInventory 200 $2
Purchase1 80 $4
Purchase2 120 $6
Purchase3 300 $9
Purchase4 180 $12
A sale of 500 units was made after purchase 3. Of the unitssold, 200 came from beginning inventory and 300 came from purchase3.
Determine the costs of goods available for sale and endinginventory in units. Then determine the costs that should beassigned to cost of goods sold and ending inventory under ach ofthe following assumptions. (For each alternative, show the grossmargin. Round unit costs to cents and totals to dollars.)
Costs are assigned under the periodic inventory system using a.)the specific identification method, b) the average-cost method, c.)FIFO method and d.) LIFO method
Costs are assigned under the perpetual inventory system usinga.) the average-cost method, b.) the FIFO method, and c) the LIFOmethod
E7A. Periodic and PerpetualSystems and Inventory Costing Methods | ||||||||||||||||
Cost of goods available forsale and ending inventory in units | ||||||||||||||||
Units | Cost | Total | ||||||||||||||
Beginninginventory | 200 | $ 2 | $ 400 | |||||||||||||
Purchase 1 | 80 | 4 | 320 | |||||||||||||
Purchase 2 | 120 | 6 | 720 | |||||||||||||
Purchase 3 | 300 | 9 | 2,700 | |||||||||||||
Purchase 4 | 180 | 12 | 2,160 | |||||||||||||
Cost of goods available forsale | 880 | $6,300 | ||||||||||||||
Sale in units | 500 | |||||||||||||||
Ending inventory inunits | 380 | |||||||||||||||
1. | Periodic inventorysystem | |||||||||||||||
a. | Specific identificationmethod: | |||||||||||||||
Sales | $8,000 | |||||||||||||||
Cost of goods available forsale | ||||||||||||||||
Less endinginventory* | ||||||||||||||||
Cost of goodssold | ||||||||||||||||
Gross margin | $4,900 | |||||||||||||||
* | Purchase 1 | 80 | units | |||||||||||||
Related questions
Altira Corporation uses a periodic inventory system. Thefollowing information related to its merchandise inventory duringthe month of August 2018 is available:
| Aug.1 | Inventory on handâ2,000 units;cost $6.10 each. |
| 8 | Purchased 10,000 units for $5.50each. |
| 14 | Sold 8,000 units for $12.00each. |
| 18 | Purchased 6,000 units for $5.00each. |
| 25 | Sold 7,000 units for $11.00each. |
| 31 | Inventory on handâ3,000 units |
Determine the inventory balance Altira would report in itsAugust 31, 2018, balance sheet and the cost of goods sold it wouldreport in its August 2018 income statement using each of thefollowing cost flow methods.
FIFO
LIFO
Average Cost
Determine the inventory balance Altira would report in itsAugust 31, 2018, balance sheet and the cost of goods sold it wouldreport in its August 2018 income statement using the FIFO method.(Round "Cost per Unit" to 2 decimal places.)
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Determine the inventory balance Altira would report in itsAugust 31, 2018, balance sheet and the cost of goods sold it wouldreport in its August 2018 income statement using LIFO method.(Round "Cost per Unit" to 2 decimal places.)
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Determine the inventory balance Altira would report in itsAugust 31, 2018, balance sheet and the cost of goods sold it wouldreport in its August 2018 income statement using Average costmethod. (Round "Average Cost per Unit" to 2 decimal places.)
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Jill Hansen owns Interior Designs, a furniture store. One of hermost popular items is a leather recliner.
Following is the recliner inventory activity for August. Therecliners on hand at August 1 had a unit cost of $280.
| Date | purchases | sales | units on hand |
| 8/1 | Balance fwd. | 80 | |
| 8/4 | 120 units @ $300 | 200 | |
| 8/20 | 140 units @ $510 | 60 | |
| 8/25 | 180 units @ $340 | 240 | |
| 8/29 | 110 units @ $590 | 13 |
If Interior Designs uses the first-in, first-out (FIFO)inventory method and periodic approach, what values would beassigned to ending inventory, cost of goods sold and grossprofit?
If Interior Designs uses the last-in, first-out (LIFO)inventory method and periodic approach, what values would beassigned to ending inventory, cost of goods sold and grossprofit?
If Interior Designs uses the weighted-average inventorymethod and periodic approach, what values would be assigned toending inventory, cost of goods sold and gross profit?
