AP7-2B (Calculation of ending inventory, cost of goods sold, and gross margin-perpetual system) Saddlery Company sells leather saddles and equipment for horse enthusiasts. Saddlery uses the perpetual inventory system. The following schedule relates to the company's inventory for the month of May: May 1 5 9 13 24 27 30 Beginning inventory Sale Purchase Purchase Sale Sale Purchase 150 units 100 units 50 units 200 units 200 units 50 units 75 units Cost $ 75,000 $ 27,500 $120,000 $ 49,500 Sales $ 65,000 $140,000 $ 40,000 Required a. Calculate Saddlery Company's cost of goods sold, gross margin, and ending inventory using: i. FIFO. ii. Weighted-average. Round per unit cost to two decimal places. b. Which cost formula produced the higher gross margin?

AP7-2B (Calculation of ending inventory, cost of goods sold, and gross margin-perpetual system) Saddlery Company sells leather saddles and equipment for horse enthusiasts. Saddlery uses the perpetual inventory system. The following schedule relates to the company's inventory for the month of May: May 1 5 9 13 24 27 30 Beginning inventory Sale Purchase Purchase Sale Sale Purchase 150 units 100 units 50 units 200 units 200 units 50 units 75 units Cost $ 75,000 $ 27,500 $120,000 $ 49,500 Sales $ 65,000 $140,000 $ 40,000 Required a. Calculate Saddlery Company's cost of goods sold, gross margin, and ending inventory using: i. FIFO. ii. Weighted-average. Round per unit cost to two decimal places. b. Which cost formula produced the higher gross margin?

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Description: AP7-2B (Calculation of ending inventory, cost of goods sold, and gross margin-perpetualsystem) Saddlery Company sells leather saddles and equipment for horse enthusiasts. Saddlery usesthe perpetual inventory system. The following schedule relates to

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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ABC Company employs a periodic inventory system and sells its inventory to customers for $20 per unit. ABC Company had the following inventory information available for May: May 1 May 3 May 8 May 13 May 18 May 20 May 24 May 30 Beginning inventory 1,900 units @ $10.20 cost per unit Purchased 2,100 units @ $11.60 cost per unit Sold 1,400 units Purchased 3,700 units @ $8.10 cost per unit Sold 2,600 units Purchase 4,100 units @ $14.70 cost per unit Sold 2,900 units Purchased 2,200 units @ $12.60 cost per unit During May, ABC Company reported operating expenses of $14,000 and had an income tax rate of 36%. Calculate the amount of net income shown on ABC Company's income statement for May using the LIFO method.
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Required information [The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date March 1 March 5 March 9 March 18 March 25 March 29 Activities Beginning inventory Purchase Sales Purchase Purchase Sales Totals Units Acquired at Cost 100 units @ $51.00 per unit 225 units @ $56.00 per unit 85 units. @ $61.00 per unit 150 units @ $63.00 per unit. 560 units Units Sold at Retail 260 units @ $86.00 per unit 130 units @ $96.00 per unit 390 units 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 include 65 units from beginning inventory, 195 units from the March 5 purchase, 45 units from the March 18 purchase, and 85 units from the March 25 purchase.
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