12/17/2016
BE104Homework#3LaraPacheco
Instructor:InternationalCollegeCayman
Islands
Assignment:BE104Homework#3
Course:BE104Fall2016
Student:LaraPacheco
Date:12/17/16
3. AssumethatRKTireStorecompletedthefollowingperpetualinventorytransactionsforalineoftires:
1
(Clicktheicontoviewthetransactions.)
Readtherequirements.2
ReviewOnly
ClicktheicontoseetheWorkedSolution.
Requirement1.ComputecostofgoodssoldandgrossprofitusingtheFIFOinventorycostingmethod.
BeginbycomputingthecostofgoodssoldandcostofendingmerchandiseinventoryusingtheFIFOinventorycosting
method.Enterthetransactionsinchronologicalorder,calculatingnewinventoryonhandbalancesaftereachtransaction.
Onceallofthetransactionshavebeenenteredintotheperpetualrecord,calculatethequantityandtotalcostof
merchandiseinventorypurchased,sold,andonhandattheendoftheperiod.(Entertheoldestinventorylayersfirst.)
Purchases
CostofGoodsSold
InventoryonHand
Unit
Total
Unit
Total
Unit
Total
Date
Quantity
Cost
Cost
Quantity
Cost
Cost
Quantity
Cost
Cost
May1
11
6 $
23
26
29
76 $
456
24 $
61 $
1,464
24 $
61 $
1,464
6 $
76 $
456
976
8 $
61 $
488
16 $
61 $
6 $
76 $
456
14 $
86 $
1,204
8 $
61 $
488
6 $
76 $
456
14 $
86 $
1,204
11 $
86 $
946
8 $
61 $
488
6 $
76 $
456
3 $
86 $
258
Totals
20
1,660
33
2,178
11
946
ComputegrossprofitusingtheFIFOinventorycostingmethod.
Grossprofitis$
759 usingtheFIFOinventorycostingmethod.
Requirement2.ComputecostofgoodssoldandgrossprofitusingtheLIFOinventorycostingmethod.
BeginbycomputingthecostofgoodssoldandcostofendingmerchandiseinventoryusingtheLIFOinventorycosting
method.Enterthetransactionsinchronologicalorder,calculatingnewinventoryonhandbalancesaftereachtransaction.
Onceallofthetransactionshavebeenenteredintotheperpetualrecord,calculatethequantityandtotalcostof
merchandiseinventorypurchased,sold,andonhandattheendoftheperiod.(Entertheoldestinventorylayersfirst.)
https://xlitemprod.pearsoncmg.com/api/v1/print/accounting
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12/17/2016
BE104Homework#3LaraPacheco
Purchases
CostofGoodsSold
InventoryonHand
Unit
Total
Unit
Total
Unit
Total
Date
Quantity
Cost
Cost
Quantity
Cost
Cost
Quantity
Cost
Cost
May1
11
6 $
24 $
61 $
1,464
24 $
61 $
1,464
6 $
76 $
456
854
6 $
76 $
456
14 $
61 $
10 $
61 $
610
14 $
86 $
14 $
61 $
854
14 $
86 $
1,204
11 $
61 $
671
29
1,204
Totals
456
26
76 $
23
1,660
14 $
86 $
3 $
61 $
20
1,204
183
33
2,453
11
671
ComputegrossprofitusingtheLIFOinventorycostingmethod.
Grossprofitis$
484 usingtheLIFOinventorycostingmethod.
Requirement3.Computecostofgoodssoldandgrossprofitusingtheweightedaverageinventorycostingmethod.
(Roundweightedaveragecostperunittothenearestcentandallotheramountstothenearestdollar.)
Beginbycomputingthecostofgoodssoldandcostofendingmerchandiseinventoryusingtheweightedaverage
inventorycostingmethod.Enterthetransactionsinchronologicalorder,calculatingnewinventoryonhandbalancesafter
eachtransaction.Onceallofthetransactionshavebeenenteredintotheperpetualrecord,calculatethequantityandtotal
costofmerchandiseinventorypurchased,sold,andonhandattheendoftheperiod.
Purchases
CostofGoodsSold
InventoryonHand
Unit
Total
Unit
Total
Unit
Total
Date
Quantity
Cost
Cost
Quantity
Cost
Cost
Quantity
Cost
Cost
May1
11
6 $
76 $
23
26
14 $
86 $
29
Totals
20
456
1,660
24 $
61 $
1,464
30 $
64 $
1,920
1,024
14 $
64 $
896
28 $
75 $
2,100
75 $
825
825
16 $
64 $
17 $
75 $
1,275
11 $
2,299
11
1,204
33
Computegrossprofitusingtheweightedaverageinventorycostingmethod.
Grossprofitis$
638 usingtheweightedaverageinventorycostingmethod.
Requirement4.Whichmethodresultsinthelargestgrossprofit,andwhy?
The FIFO
methodresultsinthelargestgrossprofitbecauseduringtimesof increasing inventoryprices,
thismethodwillproducethe lowest costofgoodssold.
1:MoreInfo
https://xlitemprod.pearsoncmg.com/api/v1/print/accounting
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12/17/2016
BE104Homework#3LaraPacheco
May1 Beginningmerchandiseinventory
24 tires@ $
61 each
6 tires@ $
76 each
23 Sale
16 tires@ $
89 each
26 Purchase
14 tires@ $
86 each
29 Sale
17 tires@ $
89 each
11 Purchase
2:Requirements
1.
ComputecostofgoodssoldandgrossprofitusingtheFIFOinventorycostingmethod.
2.
ComputecostofgoodssoldandgrossprofitusingtheLIFOinventorycostingmethod.
3.
Computecostofgoodssoldandgrossprofitusingtheweightedaverageinventorycostingmethod.(Round
weightedaveragecostperunittothenearestcentandallotheramountstothenearestdollar.)
4.
Whichmethodresultsinthelargestgrossprofit,andwhy?
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