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Problem7 1a

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Rajeev misra
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14 views8 pages

Problem7 1a

Uploaded by

Rajeev misra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Question

The
following
three
identical
units of
Item
Alpha are
purchase
d during
April:

Item
Units
Alpha
Apr. 2 Purchase 1
14 Purchase 1
28 Purchase 1
Total 3
Average cost per
unit

Assume
that one
unit is
sold on
April 30
for $132.
Determin
e the
gross
profit for
April and
ending
inventory
on April
30 using
the (a)
first-in,
first-out
(FIFO);
(b) last-in,
first-out
(LIFO);
and (c)
weighted
average
cost
methods.

Gross Ending
Profit Inventory

a. First-in,
first-out
(FIFO)

b. Last-in,
first-out
(LIFO)

c. Weight
ed
average
cost
Gross profit Cost of Ending inventory

FIFO $56 $164


LIFO $49 $157
Cost
Weighted a $52 $160
$76
81 Working
83
$240 Units Cost per unit
($240 ÷ 3
$80
units) Beginning Balance
Purchases

1 $76.00
1 $81.00
1 $83.00

Cost of goo 3

Average Cost of Inventory

Units (A) 3
Total Cost (B) $240
Average Co(C=B/A) $80.00

FIFO
Total Units Available for sale 3
Units Sold 1
Closing Stock in Units 2
Valuation
Ending Inv 1@
1@

Value Of Ending Inventory

Cost of Go240 minus 164


LIFO
Total Units Available for sale 3
Units Sold 1
Closing Stock in Units 2

Valuation
Ending Inv 1@
1@

Value Of Ending Inventory

Cost of Go240 minus 157

Weighted Average method


Total Units Available for sale 3
Units Sold 1
Closing Stock in Units 2

Valuation
Ending Inv 2@

Value Of Ending Inventory

(Total Purchase
Cost of Go
and opening stock Minus Closing Stock) $80

FIFO LIFO
Sales reve $132 $132
Less: Cost $76 $83
Gross profi $56 $49
ing inventory

value

$0

$76
$81
$83

$240.00
$83.00 $83.00
$81.00 $81.00

$164.00

$76.00

$76.00 $76
$81.00 $81

$157

$83

$80.00 $160

$160

Weighted Average
$132
$80
$52

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