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Gladstone Limited tracks the number of units purchased and sold throughout each accounting perlod but applies f nventory costing method at the end of each perlod, as if it uses a perlodic Inventory system. Assume Its accounting records provided the following Information at the end of the annual accounting perlod, December 31. Units 1,800 Unit Cost $5.00 Transactions Beginning inventory, January 1 Transactions during the year: 0. Purchase, January 30 b. 2,500 (1,450) 1,200 (1,900) 6.20 Sale, March 14 ($10 each). c. Purchase, May 1 d. Sale, August 31 ($1e each) 8.00

Gladstone Limited tracks the number of units purchased and sold throughout each accounting perlod but applies f nventory costing method at the end of each perlod, as if it uses a perlodic Inventory system. Assume Its accounting records provided the following Information at the end of the annual accounting perlod, December 31. Units 1,800 Unit Cost $5.00 Transactions Beginning inventory, January 1 Transactions during the year: 0. Purchase, January 30 b. 2,500 (1,450) 1,200 (1,900) 6.20 Sale, March 14 ($10 each). c. Purchase, May 1 d. Sale, August 31 ($1e each) 8.00

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Gladstone Limited tracks the number of units purchased and sold throughout each accounting perlod but apples Its Inventory.costing method at the end of each perlod, as if It uses a perlodic Inventory system. ASsume Its accounting records provided the following information at the end of the annual accounting perlod, December 3B1. Deginning inventory, January 2 Unity Unit Cost 55.00 2,500 (1,450) 1,200 (ee6/1) 6.20 N Purchase, January 30 bsale, March 14 ($1e each) e.Purchase, May 1 1sleAugust. 31 ($10 each) B.80 Required: 1 Compute the amount of goods avallable for sale, ending inventory, and cost of goods sold at December 31, under each of the following Inventory costing methods. For Specific Identification, assuming that the March 14, sale was selected two-ifths 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(Do not rouund Welghted average cost per unit Round your final answers to the nearest dollar amount.) Goods available for sale Ending inventory Cost of goods sold |a. Weighted average cost, b. First-in first-out. c.Specific identification., 2a. Of the three methods, which will recult in the highest gross profit? O Welghted average cost O First-in, first-out. O Specific Identification. 2-b. Of the three methods, wnich will result In the lowest Income taxes? O Weighted average cost O Fret-in, first-out O Specific Identification
Transcribed Image Text:Gladstone Limited tracks the number of units purchased and sold throughout each accounting perlod but apples Its Inventory.costing method at the end of each perlod, as if It uses a perlodic Inventory system. ASsume Its accounting records provided the following information at the end of the annual accounting perlod, December 3B1. Deginning inventory, January 2 Unity Unit Cost 55.00 2,500 (1,450) 1,200 (ee6/1) 6.20 N Purchase, January 30 bsale, March 14 ($1e each) e.Purchase, May 1 1sleAugust. 31 ($10 each) B.80 Required: 1 Compute the amount of goods avallable for sale, ending inventory, and cost of goods sold at December 31, under each of the following Inventory costing methods. For Specific Identification, assuming that the March 14, sale was selected two-ifths 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(Do not rouund Welghted average cost per unit Round your final answers to the nearest dollar amount.) Goods available for sale Ending inventory Cost of goods sold |a. Weighted average cost, b. First-in first-out. c.Specific identification., 2a. Of the three methods, which will recult in the highest gross profit? O Welghted average cost O First-in, first-out. O Specific Identification. 2-b. Of the three methods, wnich will result In the lowest Income taxes? O Weighted average cost O Fret-in, first-out O Specific Identification
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