Fresh Foods Supermarket is evaluating its inventory management system using the FIFO (First-In-First-Out) method for the first quarter of 2024. On January 1st, they had an opening inventory of 500 units at $8 per unit. During January, they purchased 300 units at $10 per unit on January 15th and another 400 units at $12 per unit on January 30th. The store sold 600 units in January at $20 per unit. At the end of January, management wants to calculate the cost of goods sold (COGS), ending inventory value, and gross profit. They also need to determine the inventory turnover ratio for January, assuming the beginning inventory from January 1st represents the average inventory. For tax purposes, they need to calculate their gross profit margin percentage.

Fresh Foods Supermarket is evaluating its inventory management system using the FIFO (First-In-First-Out) method for the first quarter of 2024. On January 1st, they had an opening inventory of 500 units at $8 per unit. During January, they purchased 300 units at $10 per unit on January 15th and another 400 units at $12 per unit on January 30th. The store sold 600 units in January at $20 per unit. At the end of January, management wants to calculate the cost of goods sold (COGS), ending inventory value, and gross profit. They also need to determine the inventory turnover ratio for January, assuming the beginning inventory from January 1st represents the average inventory. For tax purposes, they need to calculate their gross profit margin percentage.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 7MC: Questions M7-6 and M7-7 are based on the following data: City Stationers Inc. had 200 calculators on...

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Questions M7-6 and M7-7 are based on the following data: City Stationers Inc. had 200 calculators on hand on January 1, 2019, costing 18 each. Purchases and sales of calculators during the month of January were as follows: City uses a periodic inventory system. According to a physical count, 150 calculators were on hand at January 31, 2019. M7-6 The cost of the inventory on January 31, 2019, under the FIFO method is: a. 400 b. 2,700 c. 3,100 d. 3,200 M7-7 The cost of the inventory on January 31, 2019, under the LIFO method is: a. 400 b. 2,700 c. 3,100 d. 3,200
Martinez Shoe Sales has a January 31 fiscal year-end. At the start of the year, Martinez had 250 pairs of shoes in its Inventory at a cost of $30 per pair. Assume that the oldest inventory is sold first. Martinez uses a perpetual inventory system and estimates returns of 5% on all sales. During the month of February 2022, the following transactions took place: Feb. 4 Purchased 1,000 pairs for $20 each from Marigold Corp. on account, terms n/30. 11 Returned 100 pairs to Marigold for $2,000 credit because the shoes were the wrong size. 13 Sold 210 pairs for $90 each to Shoes for Kids, terms n/30. 18 Granted credit of $1,080 to Shoes for Kids for the return of 12 pairs that were the wrong colour. The shoes were restored to inventory. 26 Paid Marigold the amount owing. 28 Received payment in full from the Shoes for Kids. Record the February transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent…
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