Assume the beginning inventory as of January 1 consisted of 500 units that were purchased for $8.25 each. During the month, three new purchases were made. The first purchase consisted of 700 units costing $8.50 each, the second purchase had 800 units costing $9.00 each, and the third purchase had 600 units costing $9.50 each. At the end of the month, ending inventory shows 700 units. Compute the cost of goods sold and the ending inventory for the company using each of the following methods. Also determine the gross margin if the total sales revenue is $43,000. a. Specific identification: Of the units sold, 300 were from the beginning inventory, 600 from the first purchase, 700 from the second purchase, and 300 from the third purchase. Cost of goods sold ___ Ending inventory _ Gross profit _ b. First-in, first-out (FIFO) Cost of goods sold Ending inventory Gross profit c. Weighted-average (round the unit price) Cost of goods sold Ending inventory Gross profit d. Last-in, first-out (LIFO) Cost of goods sold Ending inventory Gross profit ____

Name: Assume the beginning inventory as of January 1 consisted of 500 units
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Description: Assume the beginning inventory as of January 1 consisted of 500 units that were purchased for $8.25 each. During the month, three new purchases were made. The first purchase consisted of 700 units costing $8.50 each, the second purchase had 800 units

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter7: Inventories

Section: Chapter Questions

Problem 4PA: The beginning inventory for Funky Party Supplies and data on purchases and sales for a three-month...

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Assume the beginning inventory as of January 1 consisted of 500 units that were purchased for $8.25 each. During the month, three new purchases were made. The first purchase consisted of 700 units costing $8.50 each, the second purchase had 800 units costing $9.00 each, and the third purchase had 600 units costing $9.50 each. At the end of the month, ending inventory shows 700 units. Compute the cost of goods sold and the ending inventory for the company using each of the following methods. Also determine the gross margin if the total sales revenue is $43,000.

a. Specific identification: Of the units sold, 300 were from the beginning inventory, 600 from the first purchase, 700 from the second purchase, and 300 from the third purchase.

Cost of goods sold		_____
Ending inventory		_____
Gross profit		_____

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

Cost of goods sold		______
Ending inventory		______
Gross profit		______

c. Weighted-average (round the unit price)

Cost of goods sold		______
Ending inventory		______
Gross profit		______

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

Cost of goods sold		______
Ending inventory		______
Gross profit		______

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