During 2020, Liberty Company has the following inventory transactions. Date Transaction Units Cost Total Cost Jan. 1 Beginning inventory 10 $430 $4,300 Apr. 9 Purchase 22 470 10,340 Oct. 4 Purchase 18 400 7,200 Total Purchases 50 $21,840 Total Sales Jan. 1-Dec. 31 Sales for 2020 44 $30,580 Required: 1. Using FIFO, calculate ending inventory, cost of goods sold and gross profit. 2. Using LIFO, calculate ending inventory, cost of goods sold and gross profit. 3. Using Weighted Average, calculate ending inventory, cost of goods sold and gross profit. 4. At the end of 2020, Liberty Company determines the remaining 6 units only have a market value of $300 per unit using the lower of cost or market (LCM) procedure under FIFO. Create a journal entry to record the necessary adjustment.
During 2020, Liberty Company has the following inventory transactions.
|
Date |
Transaction |
Units |
Cost |
Total Cost |
|
Jan. 1 |
Beginning inventory |
10 |
$430 |
$4,300 |
|
Apr. 9 |
Purchase |
22 |
470 |
10,340 |
|
Oct. 4 |
Purchase |
18 |
400 |
7,200 |
|
|
Total Purchases |
50 |
|
$21,840 |
|
|
|
|
|
|
|
|
|
|
|
Total Sales |
|
Jan. 1-Dec. 31 |
Sales for 2020 |
44 |
|
$30,580 |
Required:
1. Using FIFO, calculate ending inventory, cost of goods sold and gross profit.
2. Using LIFO, calculate ending inventory, cost of goods sold and gross profit.
3. Using Weighted Average, calculate ending inventory, cost of goods sold and gross profit.
4. At the end of 2020, Liberty Company determines the remaining 6 units only have a market value of $300 per unit using the lower of cost or market (LCM) procedure under FIFO. Create a
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