In addition to taking a physical inventory on December 31, Hurst decides to estimate the ending inventory and cost of Goods sold. During the fiscal year ended December 31, 20-2, net sales of $100,000 were made at a normal gross profit rate of 35%. Use the gross profit method to estimate the cost of goods sold for the fiscal year ended December 31 and the inventory on December 31 **Transcription:**---**2.** Assume that the market price per unit (cost to replace) of Hurst’s inventory on December 31 was $18. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods:(a) FIFO lower-of-cost-or-market (b) Weighted-average lower-of-cost-or-market**3.** In addition to taking a physical inventory on December 31, Hurst decides to estimate the ending inventory and cost of goods sold. During the fiscal year ended December 31, 20-2, net sales of $100,000 were made at a normal gross profit rate of 35%. Use the gross profit method to estimate the cost of goods sold for the fiscal year ended December 31 and the inventory on December 31.---**CHALLENGE PROBLEM**Bhushan Company has been using LIFO for inventory purposes because it would prefer to keep gross profits low for tax purposes. In its second year of operation (20-2), the controller pointed out that this strategy did not appear to work and suggested that FIFO cost of goods sold would have been higher than LIFO cost of goods sold for 20-2. Is this possible?**20-1**| Units | Cost/Unit ||---------|------------|| Purchase 1 | 100 | $1.00 || Purchase 2 | 200 | 2.00 || Purchase 3 | 300 | 3.00 || Ending inventory | 200 | |**20-2**| Units | Cost/Unit ||---------|------------|| Beginning inventory | 200 | || Purchase 4 | 200 | || Purchase 5 | 150 | $4.00 || Purchase 6 | 250 | || Ending inventory | 350 | $5.00 |--- **Mastery Problem**Hurst Company's beginning inventory and purchases during the fiscal year ended December 31, 20-2, were as follows:| Date | Description | Units | Unit Price | Total Cost ||----------------|---------------------|-------|------------|------------|| January 1, 20-2| Beginning inventory | 1,500 | $10.00 | $15,000 || January 12 | 1st purchase | 500 | $11.50 | $5,750 || February 28 | 2nd purchase | 600 | $14.50 | $8,700 || June 29 | 3rd purchase | 1,200 | $15.00 | $18,000 || August 31 | 4th purchase | 800 | $16.50 | $13,200 || October 29 | 5th purchase | 300 | $18.00 | $5,400 || November 30 | 6th purchase | 700 | $18.50 | $12,950 || December 21 | 7th purchase | 400 | $20.00 | $8,000 |Total Units: 6,000 Total Cost: $87,000 There are 1,200 units of inventory on hand on December 31, 20-2.### Required1. Calculate the total amount to be assigned to the cost of goods sold for 20-2 and ending inventory on December 31 under each of the following periodic inventory methods: - **(a) FIFO** - **(b) LIFO** - **(c) Weighted-average (round calculations to two decimal places)**(continued)

Name: In addition to taking a physical inventory on December 31, Hurst decid
Uploaded: 2024-03-20T06:32:37.000Z
Channel: Bartleby
Description: In addition to taking a physical inventory on December 31, Hurst decides to estimate the ending inventory and cost of Goods sold. During the fiscal year ended December 31, 20-2, net sales of $100,000 were made at a normal gross profit rate of 35%. Us