Problem 5-4A Periodic: Alternative cost flows P3 Refer to the information in Problem 5-3A and assume the periodic inventory system is used. Required Analysis Component 1. Compute cost of goods available for sale and the number of units available for sale. 2. Compute the number of units in ending inventory. 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (Round all amounts to cents.) 4. Compute gross profit earned by the company for each of the four costing methods in part 3. 5. The company's manager earns a bonus based on a percentage of gross profit. Which method of inventory costing produces the highest bonus for the manager? Date Problem 5-3A Perpetual: Alternative cost flows P1 Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions. (For specific identification, units sold consist of 600 units from beginning inventory, 300 from February 10 purchase, 200 from the March 13 purchase. 50 from the August 21 purchase, and 250 from the September 5 purchase.) Activities Beginning inventory Purchase Purchase Sales Jan. 1 Feb. 10 Mar. 13 Mar. 15 Aug. 21 Purchase Sep. 5 Purchase Sep. 101 3 Sales Totals Units Acquired at Cost 600 units @ $45 per unit 400 units @ $42 per unit 200 units @ $27 per unit 100 units @ $50 per unit 500 units @ $46 per unit 1,800 units Units Sold at Retall 800 units @ $75 per unit ·MOV. 600 units @ $75 per unit 1,400 units
Problem 5-4A Periodic: Alternative cost flows P3 Refer to the information in Problem 5-3A and assume the periodic inventory system is used. Required Analysis Component 1. Compute cost of goods available for sale and the number of units available for sale. 2. Compute the number of units in ending inventory. 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. (Round all amounts to cents.) 4. Compute gross profit earned by the company for each of the four costing methods in part 3. 5. The company's manager earns a bonus based on a percentage of gross profit. Which method of inventory costing produces the highest bonus for the manager? Date Problem 5-3A Perpetual: Alternative cost flows P1 Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and sales transactions. (For specific identification, units sold consist of 600 units from beginning inventory, 300 from February 10 purchase, 200 from the March 13 purchase. 50 from the August 21 purchase, and 250 from the September 5 purchase.) Activities Beginning inventory Purchase Purchase Sales Jan. 1 Feb. 10 Mar. 13 Mar. 15 Aug. 21 Purchase Sep. 5 Purchase Sep. 101 3 Sales Totals Units Acquired at Cost 600 units @ $45 per unit 400 units @ $42 per unit 200 units @ $27 per unit 100 units @ $50 per unit 500 units @ $46 per unit 1,800 units Units Sold at Retall 800 units @ $75 per unit ·MOV. 600 units @ $75 per unit 1,400 units
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter6: Cost Of Goods Sold And Inventory
Section: Chapter Questions
Problem 63E: ( Appendix 6B) Inventory Costing Methods: Periodic Inventory System The inventory accounting records...
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Question
Transcribed Image Text:Problem 5-4A Periodic: Alternative cost flows P3 Refer to the information in Problem 5-3A and assume the
periodic inventory system is used. Required Analysis Component 1. Compute cost of goods available for
sale and the number of units available for sale. 2. Compute the number of units in ending inventory. 3.
Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d)
specific identification. (Round all amounts to cents.) 4. Compute gross profit earned by the company for
each of the four costing methods in part 3. 5. The company's manager earns a bonus based on a
percentage of gross profit. Which method of inventory costing produces the highest bonus for the
manager?
Date
Problem 5-3A Perpetual: Alternative cost flows P1
Montoure Company uses a perpetual inventory system. It entered into the following calendar-year purchases and
sales transactions. (For specific identification, units sold consist of 600 units from beginning inventory, 300 from
February 10 purchase, 200 from the March 13 purchase. 50 from the August 21 purchase, and 250 from the
September 5 purchase.)
Activities
Beginning inventory
Purchase
Purchase
Sales
Jan. 1
Feb. 10
Mar. 13
Mar. 15
Aug. 21
Purchase
Sep. 5 Purchase
Sep. 101
3
Sales
Totals
Units Acquired at Cost
600 units @ $45 per unit
400 units @ $42 per unit
200 units @ $27 per unit
100 units @ $50 per unit
500 units @ $46 per unit
1,800 units
Units Sold at Retall
800 units @ $75 per unit
·MOV.
600 units @ $75 per unit
1,400 units
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