Problem 6-2B (Algo) Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for four inventory methods (LO6-3, 6-4, 6-5) Bobby's Tennis Shop has the following transactions related to its top-selling Wilson tennis racket for the month of August. Bobby's Tennis Shop uses a periodic inventory system. Transactions Beginning inventory Date August 1 Units 8 Unit Cost Total Cost $149 $1,192 August 4 Sale ($170 each) 5 August 11 Purchase 10 139 1,390 August 13 Sale ($185 each) 8 August 20 Purchase 10 129 1,290 August 26 August 29 Sale ($195 each) Purchase 11 10 119 1,190 $5,062 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. Required: 1. Calculate ending inventory and cost of goods sold at August 31, using the specific identification method. 2. Using FIFO, calculate ending inventory and cost of goods sold at August 31. 3. Using LIFO, calculate ending inventory and cost of goods sold at August 31. 4. Using weighted-average cost, calculate ending inventory and cost of goods sold at August 31. 5. Calculate sales revenue and gross profit under each of the four methods. 6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory? 7. If Bobby's chooses to report inventory using LIFO, record the LIFO adjustment.
Problem 6-2B (Algo) Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for four inventory methods (LO6-3, 6-4, 6-5) Bobby's Tennis Shop has the following transactions related to its top-selling Wilson tennis racket for the month of August. Bobby's Tennis Shop uses a periodic inventory system. Transactions Beginning inventory Date August 1 Units 8 Unit Cost Total Cost $149 $1,192 August 4 Sale ($170 each) 5 August 11 Purchase 10 139 1,390 August 13 Sale ($185 each) 8 August 20 Purchase 10 129 1,290 August 26 August 29 Sale ($195 each) Purchase 11 10 119 1,190 $5,062 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. Required: 1. Calculate ending inventory and cost of goods sold at August 31, using the specific identification method. 2. Using FIFO, calculate ending inventory and cost of goods sold at August 31. 3. Using LIFO, calculate ending inventory and cost of goods sold at August 31. 4. Using weighted-average cost, calculate ending inventory and cost of goods sold at August 31. 5. Calculate sales revenue and gross profit under each of the four methods. 6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory? 7. If Bobby's chooses to report inventory using LIFO, record the LIFO adjustment.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 6-2B (Algo) Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for
four inventory methods (LO6-3, 6-4, 6-5)
Bobby's Tennis Shop has the following transactions related to its top-selling Wilson tennis racket for the month of August. Bobby's
Tennis Shop uses a periodic inventory system.
Transactions
Beginning inventory
Date
August 1
Units
8
Unit Cost
Total Cost
$149
$1,192
August 4
Sale ($170 each)
5
August 11
Purchase
10
139
1,390
August 13
Sale ($185 each)
8
August 20
Purchase
10
129
1,290
August 26
August 29
Sale ($195 each)
Purchase
11
10
119
1,190
$5,062
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.
Required:
1. Calculate ending inventory and cost of goods sold at August 31, using the specific identification method.
2. Using FIFO, calculate ending inventory and cost of goods sold at August 31.
3. Using LIFO, calculate ending inventory and cost of goods sold at August 31.
4. Using weighted-average cost, calculate ending inventory and cost of goods sold at August 31.
5. Calculate sales revenue and gross profit under each of the four methods.
6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory?
7. If Bobby's chooses to report inventory using LIFO, record the LIFO adjustment.
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