### Learning Objectives 2, 3#### 1. COGS $2,140### Inventory Transactions for AB Tire StoreAssume that AB Tire Store completed the following perpetual inventory transactions for a line of tires:| Date | Transaction | Quantity | Unit Price ||------|-----------------------------------|----------|------------|| May 1 | Beginning merchandise inventory | 16 tires | $65 each || May 11 | Purchase | 10 tires | $78 each || May 23 | Sale | 12 tires | $88 each || May 26 | Purchase | 14 tires | $80 each || May 29 | Sale | 18 tires | $88 each |### Requirements1. **Compute cost of goods sold and gross profit using the FIFO inventory costing method.**2. **Compute cost of goods sold and gross profit using the LIFO inventory costing method.**### Explanation#### FIFO (First In, First Out) MethodFIFO assumes that the oldest inventory items are sold first. The cost of goods sold (COGS) will be based on the cost of the earliest purchases.#### LIFO (Last In, First Out) MethodLIFO assumes that the newest inventory items are sold first. The cost of goods sold (COGS) will be based on the cost of the latest purchases.This exercise is designed to familiarize students with the application of FIFO and LIFO inventory costing methods, and how these methods affect the cost of goods sold and the gross profit calculations. **Inventory Transactions Example for AB Tire Store**AB Tire Store has conducted a series of perpetual inventory transactions for a specific line of tires during the month of May. Below is the summary of these transactions:**Transactions Details**| Date | Description | Quantity | Unit Price ||------------|------------------------------|------------|------------|| May 1 | Beginning merchandise inventory | 16 tires | $65 each || May 11 | Purchase | 10 tires | $78 each || May 23 | Sale | 12 tires | $88 each || May 26 | Purchase | 14 tires | $80 each || May 29 | Sale | 18 tires | $88 each |**Requirements for Calculation**1. **Compute the cost of goods sold (COGS) and gross profit using the FIFO (First In, First Out) inventory costing method.**2. **Compute the cost of goods sold (COGS) and gross profit using the LIFO (Last In, First Out) inventory costing method.**3. **Compute the cost of goods sold (COGS) and gross profit using the weighted-average inventory costing method.** - Round the weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.4. **Determine which method yields the largest gross profit and explain why.**This exercise aims to demonstrate how different inventory costing methods impact the cost of goods sold and gross profit in a retail setting.

Answered: Image /qna-images/answer/63fc7850-667a-40a3-b246-8852c7cfafb2.jpg

Assume that AB Tire Store completed the following perpetual inventory transactions for a line of tires: May 1 Beginning merchandise inventory 11 Purchase 23 Sale 26 Purchase 29 Sale 16 tires @ $ 65 each 10 tires @ $78 each 12 tires @ $88 each 14 tires @ $ 80 each 18 tires @ $88 each Requirements 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method. 2. Compute cost of goods sold and gross profit using the LIFO inventory costing method. 3. Compute cost of goods sold and gross profit using the weighted-average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.) 4. Which method results in the largest gross profit, and why?

Assume that AB Tire Store completed the following perpetual inventory transactions for a line of tires: May 1 Beginning merchandise inventory 11 Purchase 23 Sale 26 Purchase 29 Sale 16 tires @ $ 65 each 10 tires @ $78 each 12 tires @ $88 each 14 tires @ $ 80 each 18 tires @ $88 each Requirements 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method. 2. Compute cost of goods sold and gross profit using the LIFO inventory costing method. 3. Compute cost of goods sold and gross profit using the weighted-average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.) 4. Which method results in the largest gross profit, and why?

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter5: Inventories And Cost Of Goods Sold

Section: Chapter Questions

Problem 5.6DC

See similar textbooks

Similar questions

CNOWv2 Student Help x + enow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession Locato... 시기 wsing Protection X Chapter 9 < Cost of merchandise sold Inventories: Beginning of year eBook Inventory Turnover and Days' Sales in Inventory Financial statement data for years ending December 31 for Amsterdam Company follow: End of year 20Y4 20Y3 X Inventory Turnover 20Y4 Show Me How 20Y3 CengageNOWv2 | Online t X Search 20Y4 $3,598,900 593,000 648,000 a. Determine the inventory turnover for 20Y4 and 20Y3. Round to one decimal place. Print Item 20Y3 $3,015,630 b. Determine the days' sales in inventory for 20Y4 and 20Y3. Assume 365 days a year. Round interim calculations and final answers to one decimal place. OL 589,600 Days' Sales in Inventory days days c. Does the change in the inventory turnover and the days' sales in inventory from 20Y3 to 20Y4 indicate a favorable or an unfavorable 593,000 10 Q 813 PrtSc Insert S 1 3/
Please do not give solution in image format thanku
Problem: Module 2 Textbook Problem 10 Learning Objective: Module 2-7 Show how different inventory cost flow methods (specific identification, FIFO, LIFO, and weighted average) affect financial statements The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: Jan. 20 Apr. 21 July 25 Sept. 19 Purchased Purchased Purchased Purchased 400 units @ 90 units @ 250 units 60 units $ 4- $5- $7 = $9- During the year. The Shirt Shop sold 650 T-shirts for $14 each. Required Gross margin $1,600 450 1,750 540 a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions. Complete this question by entering your answers in the tabs below. Required A Required B Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.…
chapter 6 > Short Exercises For all short exercises, assume the perpetual inventory system is used unless stated otherwise. Learning Objective 1 S6-1 Determining inventory accounting principles Ward Hardware used the FIFO inventory costing method in 2018. Ward plans to continue using the FIFO method in future years. Which accounting principle is most relevant to Ward's decision?
S Module Three Assignment - ACC X * CengageNOWv2 | Online teachin x now.com/ilm/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogre. * O eBook Show Me How Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales for Item 88-HX are as follows: Jan. 1 Inventory 100 units @ $28 8. Sale 80 units 15 Purchase 111 units @ $32 27 Sale 93 units Assuming a perpetual inventory system and using the last-in, first-out (LIFO) method, determine (a) the cost of goods sold on Jan. 27 and (b) the inventory on Jan. 31. a. Cost of goods sold on Jan. 27 b. Inventory on Jan. 31 (Previous Check My Work 6:33 AM A 45°F ヘロ回ロ 11/13/2021 prt sc delete home ho A 144 40 af- + backspace 9.
Questions are on image
KS Module Three Assignment - AC * CengageNOwv2 | Online teachir ngagenow.com/ilm/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogre.. еВook Show Me How Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales for Item Zeta9 are as follows: Oct. 1 Inventory 76 units @ $17 7. Sale 51 units 15 Purchase 69 units @ $18 24 Sale 32 units perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of goods sold on October 24 and (b) the Assuming inventory on October 31. a. Cost of goods sold on October 24 b. Inventory on October 31 Check My Work Previous Next 6:38 AM 45°F 11/13/2021
7:25SW YO □ Learning Objectives 2, 3 2. Ending Merch. Inv. $73 Dec. 1 Beginning merchandise inventory Assume that Toys Galore store bought and sold a line of dolls during December as follows: 8 Sale 14 Purchase 21 Sale QAA C 363/ 1480 13 units @ $9 each 8 units @ $ 22 each 16 units @ $ 14 each 5G 71% 14 units @ $22 each Requirements 1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method. 2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method. 3. Which method results in a higher cost of goods sold? 4. Which method results in a higher cost of ending merchandise inventory? 5. Which method results in a higher gross profit? GO ||| 0 <
Bookmarks eBook Window aphing and learning resource from Cengage Learning Oct. 1 4 30 13 22 $ Perpetual Inventory Using Weighted Average Beginning inventory, purchases, and sales for WCS12 are as follows: units at $11 29 Proud Sale Help Inventory Sale Purchase 190 units 370 units at $12 200 units 5 Check My Work 8 more Check My Work uses remaining Show Me How v2.cengagenow.com 15 ^ I an sopia of you! 6 a. Assuming a perpetual inventory system and using the weighted average method, determine the weighted average unit cost after the October 22 purchase. Round your answer to two decimal places. S per unit b. Assuming a perpetual inventory system and using the weighted average method, determine the cost of goods sold on October 29. Round your "average unit cost to two decimal places. All work saved. c. Assuming a perpetual inventory system and using the weighted average method, determine the inventory on October 31. Round your "average unit cost" to two decimal places. MacBook Pro & 7 Love…
Bookmarks Window Help eBook Chapter 6 Homework 12 Date Jan. 1 Apr. 19 June 30 Perpetual Inventory Using FIFO The following units of a particular item were available for sale during the calendar year: Jan. 1 Inventory 3,900 units at $41 Apr. 19 Sale 2,500 units June 30 4,400 units at $45 Sept. 2 4,800 units Nov. 15 1,800 units at $47 The firm maintains a perpetual inventory system. Determine the cost of goods sold for each sale and the inventory balance after each sale, assuming the first-in, first-out method. Present the data in the form illustrated in Exhibit 3. Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column. Sept. 2 Nov. 15 Dec. 31 Feedback 0 Check My Work M Purchase Sale Purchase Quantity 4,400 1,800 ✓ Balances Print Item BE Purchases Unit Cost MAR 7 45 v2.cengagenow.com 47 Total Cost $198,000 ✓ 84,600✔ Schedule of Cost of Goods Sold FIFO…
Do not give answer in image
Help solving problem