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 periodic inventory system. Date Transactions Units Unit Cost Total Cost March 1 Beginning inventory 20 $ 150 $ 3,000 March 5 Sale ($200 each) 15 March 9 Purchase 10 170 1,700 March 17 Sale ($250 each) 8 March 22 Purchase 10 180 1,800 March 27 Sale ($275 each) 12 March 30 Purchase 7 200 1,400 $ 7,900 For the specific identification method, the March 5 sale consists of bikes from beginning inventory, the March 17 sale consists 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. rev: 02_28_2017_QC_CS-80932, 04_13_2020_QC_CS-208026 6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory? 7. If Greg’s Bicycle Shop chooses to report inventory using LIFO instead of FIFO, record the LIFO adjustment. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

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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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 periodic inventory system.

Date		Transactions	Units	Unit Cost	Total Cost
March	1		Beginning inventory	20		$	150	$	3,000
March	5		Sale ($200 each)	15
March	9		Purchase	10			170		1,700
March	17		Sale ($250 each)	8
March	22		Purchase	10			180		1,800
March	27		Sale ($275 each)	12
March	30		Purchase	7			200		1,400
								$	7,900

For the specific identification method, the March 5 sale consists of bikes from beginning inventory, the March 17 sale consists 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.

rev: 02_28_2017_QC_CS-80932, 04_13_2020_QC_CS-208026

6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory?

7. If Greg’s Bicycle Shop chooses to report inventory using LIFO instead of FIFO, record the LIFO adjustment. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

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