Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Beginning inventory, January 1 Transactions during the year: a. Purchase, January 30 b. Sale, March 14 ($100 each). c. Purchase, May 1 d. Sale, August 31 ($100 each) Units Unit Cost 1,500 $ 40 2,900 52 (1,150) 1,600 (1,600) 70 Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning Inventory and three-fifths from the purchase of January 30. Required: 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: a. Last-in, first-out. b. Weighted average cost. c. First-in, first-out. d. Specific identification, assuming that the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1. 22-a. Of the four methods, which will result in the highest gross profit? 2-b. Of the four methods, which will result in the lowest income taxes? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Compute the amount of mande suallable for cale andinn inventors and east of aande eald at December 31 under each of the
Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Beginning inventory, January 1 Transactions during the year: a. Purchase, January 30 b. Sale, March 14 ($100 each). c. Purchase, May 1 d. Sale, August 31 ($100 each) Units Unit Cost 1,500 $ 40 2,900 52 (1,150) 1,600 (1,600) 70 Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning Inventory and three-fifths from the purchase of January 30. Required: 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: a. Last-in, first-out. b. Weighted average cost. c. First-in, first-out. d. Specific identification, assuming that the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1. 22-a. Of the four methods, which will result in the highest gross profit? 2-b. Of the four methods, which will result in the lowest income taxes? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Compute the amount of mande suallable for cale andinn inventors and east of aande eald at December 31 under each of the
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory
costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the
following information at the end of the annual accounting period, December 31.
Transactions
Beginning inventory, January 1
Transactions during the year:
a. Purchase, January 30
b. Sale, March 14 ($100 each).
c. Purchase, May 1
d. Sale, August 31 ($100 each)
Units
Unit
Cost
1,500
$ 40
2,900
52
(1,150)
1,600
(1,600)
70
Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and
three-fifths from the purchase of January 30.
Required:
1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the
following inventory costing methods:
a. Last-in, first-out.
b. Weighted average cost.
c. First-in, first-out.
d. Specific identification, assuming that the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from
the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the
balance from the purchase of May 1.
22-a. Of the four methods, which will result in the highest gross profit?
2-b. Of the four methods, which will result in the lowest income taxes?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2A
Req 28
Compute the amount of mande svallshle for esle andinn inventams and east of aande eald at December 21 under each of the
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Step 1: Introduce to FIFO, LIFO and Weighted Average Method
VIEWStep 2: Working for cost of goods sold and ending ending using FIFO Method
VIEWStep 3: Working for cost of goods sold and ending ending using LIFO Method
VIEWStep 4: Working for cost of goods sold and ending ending using weighted average Method
VIEWStep 5: Working for cost of goods sold and ending ending using specific identification Method
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