Sandra’s Purse Boutique has the following transactions related to its top-selling Gucci purse for the month of October. Sandra's Purse Boutique uses a periodic inventory system.
 

Date   Transactions Units   Unit Cost   Total Cost October 1   Beginning inventory   6     $ 820       $ 4,920     October 4   Sale   4                       October 10   Purchase   5       830         4,150     October 13   Sale   3                       October 20   Purchase   4       840         3,360     October 28   Sale   7                       October 30   Purchase   8       850         6,800                               $ 19,230    

 

Required:

1. Calculate ending inventory and cost of goods sold at October 31, using the specific identification method. The October 4 sale consists of purses from beginning inventory, the October 13 sale consists of one purse from beginning inventory and two purses from the October 10 purchase, and the October 28 sale consists of three purses from the October 10 purchase and four purses from the October 20 purchase.

1. October 6 The customer in the October 1 sale returned $150 of merchandise for full credit. The merchandise, which had cost $90, is returned to inventory.

) Stewart Company sold 180 units @ $320 each on October 31, YearXXX1. Cash selling and administrative expenses were $15,000. Thefollowing information about the purchase of inventory and carryingvalue of inventory on January 1, Year XXX1 is also available:

Beginning inventory 30 units @$180

Feb 3purchase 60 units @$190

June 2purchase 70 units @$220

October 1 purchase 40 units@$230

The company’s income tax rate is 40%.
Required:
a) Determine the amount of cost of goods sold using:
FIFO
LIFO
Weighted Average
b) Determine the dollar value of ending inventory using:
FIFO
LIFO
Weighted Average
c) Determine the company's net income (after income taxes)using:
FIFO
LIFO

Weighted Average

Gap’O has projected sales of 325,000 hospital gowns in October. Each gown requires 2.5 yards of fabric. Th e beginning inventory of fabric and gowns, respectively, are 5,000 yards and 21,000 gowns. Gap’O wants to have 4,550 yards of fabric and 15,800 gowns on hand at the end of October. The fabric comes in 15-yard bolts. If Gap’O has no beginning or ending Work in Process Inventory, how many bolts of fabric must the company purchase in October?