Ariana Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. Ariana Bicycle Shop uses a periodic inventory system. Transactions Beginning inventory Date March 1 Units 20 Unit Cost Total Cost $165 $3,300 March 5 March 9 Sale ($230 each) 15 Purchase 10 185 1,850 March 17 Sale ($280 each) 8 March 22 Purchase 10 195 1,950 March 27 March 30 Sale ($305 each) Purchase 12 7 215 1,505 $8,605 For the specific identification method, the March 5 sale consists of bikes from beginning inventory, the March 17 sale consists of bikes from the March 9 purchase, and the March 27 sale consists of four bikes from beginning inventory and eight bikes from the March 22 purchase. Required: 1. Calculate ending inventory and cost of goods sold at March 31, using the specific identification method. 2. Using FIFO, calculate ending inventory and cost of goods sold at March 31. 3. Using LIFO, calculate ending inventory and cost of goods sold at March 31. 4. Using weighted-average cost, calculate ending inventory and cost of goods sold at March 31. 5. Calculate sales revenue and gross profit under each of the four methods. 6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory? 7. If Ariana Bicycle Shop chooses to report inventory using LIFO instead of FIFO, record the LIFO adjustment.
Ariana Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. Ariana Bicycle Shop uses a periodic inventory system. Transactions Beginning inventory Date March 1 Units 20 Unit Cost Total Cost $165 $3,300 March 5 March 9 Sale ($230 each) 15 Purchase 10 185 1,850 March 17 Sale ($280 each) 8 March 22 Purchase 10 195 1,950 March 27 March 30 Sale ($305 each) Purchase 12 7 215 1,505 $8,605 For the specific identification method, the March 5 sale consists of bikes from beginning inventory, the March 17 sale consists of bikes from the March 9 purchase, and the March 27 sale consists of four bikes from beginning inventory and eight bikes from the March 22 purchase. Required: 1. Calculate ending inventory and cost of goods sold at March 31, using the specific identification method. 2. Using FIFO, calculate ending inventory and cost of goods sold at March 31. 3. Using LIFO, calculate ending inventory and cost of goods sold at March 31. 4. Using weighted-average cost, calculate ending inventory and cost of goods sold at March 31. 5. Calculate sales revenue and gross profit under each of the four methods. 6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory? 7. If Ariana Bicycle Shop chooses to report inventory using LIFO instead of FIFO, record the LIFO adjustment.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Ariana Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. Ariana
Bicycle Shop uses a periodic inventory system.
Transactions
Beginning inventory
Date
March 1
Units
20
Unit Cost
Total Cost
$165
$3,300
March 5
March 9
Sale ($230 each)
15
Purchase
10
185
1,850
March 17
Sale ($280 each)
8
March 22
Purchase
10
195
1,950
March 27
March 30
Sale ($305 each)
Purchase
12
7
215
1,505
$8,605
For the specific identification method, the March 5 sale consists of bikes from beginning inventory, the March 17 sale consists of bikes
from the March 9 purchase, and the March 27 sale consists of four bikes from beginning inventory and eight bikes from the March 22
purchase.
Required:
1. Calculate ending inventory and cost of goods sold at March 31, using the specific identification method.
2. Using FIFO, calculate ending inventory and cost of goods sold at March 31.
3. Using LIFO, calculate ending inventory and cost of goods sold at March 31.
4. Using weighted-average cost, calculate ending inventory and cost of goods sold at March 31.
5. Calculate sales revenue and gross profit under each of the four methods.
6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory?
7. If Ariana Bicycle Shop chooses to report inventory using LIFO instead of FIFO, record the LIFO adjustment.
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