Pete’s Tennis Shop has the following transactions related to its top-selling Wilson tennis racket for the month of August. Pete’s Tennis Shop uses a periodic inventory system. Date Transactions Units Unit Cost Total Cost August 1 Beginning inventory 8 $150 $1,200 August 4 Sale ($175 each) 5 August 11 Purchase 10 140 1,400 August 13 Sale ($190 each) 8 August 20 Purchase 10 130 1,300 August 26 Sale ($200 each) 11 August 29 Purchase 12 120 1,440 5,340 For the specific identification method, the August 4 sale consists of rackets from beginning inventory, the August 13 sale consists of rackets from the August 11 purchase, and the August 26 sale consists of one racket from beginning inventory and 10 rackets from the August 20 purchase. 5. Calculate sales revenue and gross profit under each of the four methods. (Round weighted-average cost amounts to 2 decimal places.) Specific Identification FIFO LIFO Weighted-average cost Sales revenue $4,595 $4,595 $4,595 $4,595.00 Cost of goods sold 3,320 3,380 Gross profit $1,275 1215
Pete’s Tennis Shop has the following transactions related to its top-selling Wilson tennis racket for the month of August. Pete’s Tennis Shop uses a periodic inventory system. Date Transactions Units Unit Cost Total Cost August 1 Beginning inventory 8 $150 $1,200 August 4 Sale ($175 each) 5 August 11 Purchase 10 140 1,400 August 13 Sale ($190 each) 8 August 20 Purchase 10 130 1,300 August 26 Sale ($200 each) 11 August 29 Purchase 12 120 1,440 5,340 For the specific identification method, the August 4 sale consists of rackets from beginning inventory, the August 13 sale consists of rackets from the August 11 purchase, and the August 26 sale consists of one racket from beginning inventory and 10 rackets from the August 20 purchase. 5. Calculate sales revenue and gross profit under each of the four methods. (Round weighted-average cost amounts to 2 decimal places.) Specific Identification FIFO LIFO Weighted-average cost Sales revenue $4,595 $4,595 $4,595 $4,595.00 Cost of goods sold 3,320 3,380 Gross profit $1,275 1215
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pete’s Tennis Shop has the following transactions related to its top-selling Wilson tennis racket for the month of August. Pete’s Tennis Shop uses a periodic inventory system.
| Date | Transactions | Units | Unit Cost | Total Cost | |
| August | 1 | Beginning inventory | 8 | $150 | $1,200 |
| August | 4 | Sale ($175 each) | 5 | ||
| August | 11 | Purchase | 10 | 140 | 1,400 |
| August | 13 | Sale ($190 each) | 8 | ||
| August | 20 | Purchase | 10 | 130 | 1,300 |
| August | 26 | Sale ($200 each) | 11 | ||
| August | 29 | Purchase | 12 | 120 | 1,440 |
| 5,340 |
For the specific identification method, the August 4 sale consists of rackets from beginning inventory, the August 13 sale consists of rackets from the August 11 purchase, and the August 26 sale consists of one racket from beginning inventory and 10 rackets from the August 20 purchase.
5. Calculate sales revenue and gross profit under each of the four methods. (Round weighted-average cost amounts to 2 decimal places.)
|
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