Problem 5-3A Perpetual: Alternative Cost Flows LO P1

[removed]

1.

value:

15.00 points

Problem 5-3A Perpetual: Alternative cost flows LO P1

Montoure Company uses a perpetual inventory system. It entered into the following calendar-year 2015 purchases and sales transactions.

Date Activities Units Acquired at Cost Units Sold at Retail

  Jan. 1 Beginning inventory 600 units @ $ 35 per unit

  Feb. 10 Purchase 300 units @ $ 32 per unit

  Mar. 13 Purchase 150 units @ $ 20 per unit

  Mar. 15 Sales 725 units @ $ 80 per unit

  Aug. 21 Purchase 190 units @ $ 40 per unit

  Sept. 5 Purchase 540 units @ $ 37 per unit

  Sept. 10 Sales 730 units @ $ 80 per unit

        Totals 1,780 units 1,455 units

Required:

1.

Compute cost of goods available for sale and the number of units available for sale.

2. Compute the number of units in ending inventory.

3.

Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification units sold consist of 600 units from beginning inventory, 200 from the February 10 purchase, 150 from the March 13 purchase, 140 from the August 21 purchase, and 365 from the September 5 purchase. (Round your average cost per unit to 2 decimal places.)

4.

Compute gross profit earned by the company for each of the four costing methods. (Round your average cost per unit to 2 decimal places.)

References

eBook & Resources

WorksheetDifficulty: 3 Hard

Problem 5-3A Perpetual: Alternative cost flows LO P1Learning Objective: 05-P1 Compute inventory in a perpetual system using the methods of specific identification, FIFO, LIFO, and weighted average.

Check my work

©2016 McGraw-Hill Education. All rights reserved.