3. Using LIFO, calculate ending inventory and cost of goods sold at March 31. !Required information[Ihe following intormation applies to the questions aisplayed below.JGreg's Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month ofMarch. Greg's Bicycle Shop uses a pericdic inventory system.DateTransactionsUnitsUnit CostTotal Cost$ 4,200Bcginning inventorySale ($320 each)March129$ 210March515MarchPurchase192302,300Sale ($3/0 each)PurchaseSale ($395 each)PurchaseMarch17March22192402,400March2712March3072601,820$10,720For the spccific identification mcthod, thc March 5 salc consists of bikes from beginning invcntory, the March 17 saleconsiss of bikes from the March 9 purchase, and the March 27 sale consists of four bikes from beginning Inventory andeight bikes from the March 22 purchase.3. Using LIFO. calculate ending inventory and cost of goods sold at March 31.Ending inventoryCost of goods sold

Inventory or Stock is the goods and material a business holds for resale. Before working on the purchase and sales of inventory, below are the two methods of recording inventory: Periodic inventory system. Perpetual inventory system. Periodic method:- Under periodic inventory system inventory account is not updated for each purchase and each sale. All purchases are debited to purchases account. At the end of the period, the total in purchases account is added to the beginning balance of the inventory to compute cost of goods available for sale. The ending inventory is then subtracted from the cost of goods available for sale to compute cost of goods sold. The ending inventory is computed at the end of the period by a physical count. Cost of goods sold= Beginning inventory+ Net purchases - ending inventory Perpetual method :- Under the perpetual system the inventory account is constantly (or perpetually) changing. When there is purchase of inventory, buyer record it as debit to inventory account( rather than using purchase account as used under periodic method). And when there is sales, inventory account is decreased(credited) and it is charged to cost of goods sold account. So here no need to calculate cost of goods sold at the end of accounting period, as with each sales, cost of goods sold account is updated. Perpetual inventory system is by far better method for tracking inventory, since it can provides reasonably accurate results on an ongoing basis, if properly managed.Inventory valuation methods are used to determine the cost of goods sold and cost of ending inventory. Following are the most common methods used for inventory valuation. FIFO LIFO Weighted average LIFO:- As the name suggests Last in First out, this method assumes that the inventory purchased first are sold last and inventory purchased last is sold first. It is exact opposite than the FIFO assumption. Th problem with LIFO is that it is rarely actually used by companies. If LIFO is to be used by companies than many of the inventory will become obsolete. Interesting thing is companies do not actually practice LIFO flow in order to use accounting method of LIFO for inventory valuation. LIFO is banned under international finance reporting standard. We will calculate Cost of Goods Sold & Ending Inventory in following table, Therefore, the Cost of Goods Sold & Ending Inventory under LIFO Method is, COGS - $7,850 Ending Inventory - 12 Units

Business

Accounting

Greg's Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. Greg's Bicycle Shop uses a pericdic inventory system. Date Transactions Units Unit Cɔst Total Cost $ 210 $ 4,200 March 1 March Bcginning inventory Sole ($320 each) Purchase 29 5 15 March 19 230 2,300 March Sale ($3/0 each) Purchase Sale ($395 each) 1! March 22 March 27 March 30 19 240 2,400 12 Purchase 260 1,820 $10,720 For the spccific identification mcthod, the March 5 salc consists of bikcs from bcginning inventory, the March 17 sale consis:s of bikes from the March 9 purchase, and the March 27 sale consists of four bikes from beginning inventory and eight bikes from the March 22 purchase. 3. Using LIFO. calculate endirg inventory and cost of goods sold at March 31. Ending inventory Cost of goods sold

Greg's Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. Greg's Bicycle Shop uses a pericdic inventory system. Date Transactions Units Unit Cɔst Total Cost $ 210 $ 4,200 March 1 March Bcginning inventory Sole ($320 each) Purchase 29 5 15 March 19 230 2,300 March Sale ($3/0 each) Purchase Sale ($395 each) 1! March 22 March 27 March 30 19 240 2,400 12 Purchase 260 1,820 $10,720 For the spccific identification mcthod, the March 5 salc consists of bikcs from bcginning inventory, the March 17 sale consis:s of bikes from the March 9 purchase, and the March 27 sale consists of four bikes from beginning inventory and eight bikes from the March 22 purchase. 3. Using LIFO. calculate endirg inventory and cost of goods sold at March 31. Ending inventory Cost of goods sold

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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Problem 1 of 2 (note additional problem below): Calculate the cost of goods sold dollar value and the value of ending inventory for En Cee Yo0 Company for the sale on March 11, considering the following transactions under three different cost allocation methods and using perpetual inventory updating. Provide calculations for (a) first-in, first-out (FIFO); (b) last-in, first-out (LIF0); and (c) weighted average (AVG). You must show your work and calculations--answers that are correct but do not show calculations are graded as a zero grade. Place your answers in the shaded cells. Number of Units Unit Cost 110 $ Beginning inventory, March 1 Purchased inventory, March 8 86 140 $ 90 Sold inventory for $110 per unit, March 11 95 If you use the FIFO method, the dollar value of COGS is → and the dollar value of ending inventory is- If you use the LIFO method, the dollar value of COGS is - and the dollar value of ending inventory is- If you use the Weighted Average method, the dollar value of…
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Subject: accounting
Glasgow Corporation has the following inventory transactions during the year. Unit Number of Units 53 133 Cost $ 45 47 Total Cost $ 2,385 6,251 10,150 5,763 Date Transaction Jan. 1 Beginning inventory Purchase Purchase Purchase Apr. 7 Jul.16 203 50 Oct. 6 113 51 502 $24,549 For the entire year, the company sells 433 units of inventory for $63 each.
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