Natalie is busy establishing both divisions of her business (cookie classes and mixer sales) and completing her business degree. Her goals for the next 11 months are to sell one mixer per month and to give two to three classes per week. The cost of the fine European mixers is expected to increase. Natalie has just negotiated new terms with Wildhorse that include shipping costs in the negotiated purchase price (mixers will be shipped FOB destination from the supplier to Natalie.) Assume that Natalie has now decided to use a periodic inventory system and now must choose a cost flow assumption for her mixer inventory. Inventory as on January 31, 2023 represents three mixer purchased at a unit cost of $776. The following transactions occur in February to May 2023. Feb. 2 Natalie buys two mixers on account from Wildhorse Supply Co. for $1,560 ($780 each), FOB destination, terms n/30. 16 She sells one mixer for $1,495 cash. 25 She pays the amount owed to Wildhorse. Mar. 2 She buys one mixer on account from Wildhorse Supply Co. for $794, FOB destination, terms n/30. 30 Natalie sells two mixers for a total of $2,990 cash. 31 She pays the amount owed to Wildhorse. Apr. 1 She buys two mixers on account from Wildhorse Supply Co. for $1,580 ($790 each), FOB destination, terms n/30. 13 She sells three mixers for a total of $4,485 cash. 30 Natalie pays the amounts owed to Wildhorse. May 4 She buys two mixers on account from Wildhorse Supply Co. for $1,650 ($825 each), FOB destination, terms n/30. 27 She sells one mixer for $1,495 cash. Calculate (i) ending inventory, (ii) cost of goods sold, and (iii) gross profit under each of the following methods: LIFO, FIFO, and average cost. (Round average unit cost to 2 decimal places, e.g. 2.225. Round average cost answers to 2 decimal places, e.g. 2,405.22 and all other answers to 0 decimal places, e.g. 2,525.) LIFO FIFO Average-Cost Ending inventory $ $ $ Cost of goods sold $ $ $ Gross profit

Natalie is busy establishing both divisions of her business (cookie classes and mixer sales) and completing her business degree. Her goals for the next 11 months are to sell one mixer per month and to give two to three classes per week. The cost of the fine European mixers is expected to increase. Natalie has just negotiated new terms with Wildhorse that include shipping costs in the negotiated purchase price (mixers will be shipped FOB destination from the supplier to Natalie.) Assume that Natalie has now decided to use a periodic inventory system and now must choose a cost flow assumption for her mixer inventory. Inventory as on January 31, 2023 represents three mixer purchased at a unit cost of $776. The following transactions occur in February to May 2023. Feb. 2 Natalie buys two mixers on account from Wildhorse Supply Co. for $1,560 ($780 each), FOB destination, terms n/30. 16 She sells one mixer for $1,495 cash. 25 She pays the amount owed to Wildhorse. Mar. 2 She buys one mixer on account from Wildhorse Supply Co. for $794, FOB destination, terms n/30. 30 Natalie sells two mixers for a total of $2,990 cash. 31 She pays the amount owed to Wildhorse. Apr. 1 She buys two mixers on account from Wildhorse Supply Co. for $1,580 ($790 each), FOB destination, terms n/30. 13 She sells three mixers for a total of $4,485 cash. 30 Natalie pays the amounts owed to Wildhorse. May 4 She buys two mixers on account from Wildhorse Supply Co. for $1,650 ($825 each), FOB destination, terms n/30. 27 She sells one mixer for $1,495 cash. Calculate (i) ending inventory, (ii) cost of goods sold, and (iii) gross profit under each of the following methods: LIFO, FIFO, and average cost. (Round average unit cost to 2 decimal places, e.g. 2.225. Round average cost answers to 2 decimal places, e.g. 2,405.22 and all other answers to 0 decimal places, e.g. 2,525.) LIFO FIFO Average-Cost Ending inventory $ $ $ Cost of goods sold $ $ $ Gross profit

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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Feb. 2		Natalie buys two mixers on account from Wildhorse Supply Co. for $1,560 ($780 each), FOB destination, terms n/30.
16		She sells one mixer for $1,495 cash.
25		She pays the amount owed to Wildhorse.
Mar. 2		She buys one mixer on account from Wildhorse Supply Co. for $794, FOB destination, terms n/30.
30		Natalie sells two mixers for a total of $2,990 cash.
31		She pays the amount owed to Wildhorse.
Apr. 1		She buys two mixers on account from Wildhorse Supply Co. for $1,580 ($790 each), FOB destination, terms n/30.
13		She sells three mixers for a total of $4,485 cash.
30		Natalie pays the amounts owed to Wildhorse.
May 4		She buys two mixers on account from Wildhorse Supply Co. for $1,650 ($825 each), FOB destination, terms n/30.
27		She sells one mixer for $1,495 cash.

Calculate (i) ending inventory, (ii) cost of goods sold, and (iii) gross profit under each of the following methods: LIFO, FIFO, and average cost. (Round average unit cost to 2 decimal places, e.g. 2.225. Round average cost answers to 2 decimal places, e.g. 2,405.22 and all other answers to 0 decimal places, e.g. 2,525.)

	LIFO	FIFO	Average-Cost
Ending inventory	$	$	$
Cost of goods sold	$	$	$
Gross profit	$

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