Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.| Transactions | Units | Unit Cost ||--------------------------------------|-------|-----------|| Beginning inventory, January 1 | 190 | $33 || Transactions during the year: | | || a. Purchase on account, March 2 | 295 | 35 || b. Cash sale, April 1 ($49 each) | (340) | || c. Purchase on account, June 30 | 240 | 39 || d. Cash sale, August 1 ($49 each) | (95) | |**TIP:** Although the purchases and sales are listed in chronological order, Scrappers determines the cost of goods sold *after* all of the purchases have occurred.**Required:**1. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: *(Round "Cost per Unit" to 2 decimal places.)* a. Last-in, first-out. b. Weighted average cost. c. First-in, first-out. d. Specific identification, assuming that the April 1 sale was selected one-fifth from the beginning inventory and four-fifths from the purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30. 2. Of the four methods, which will result in the highest gross profit? Which will result in the lowest income taxes? **Instructions:****Complete this question by entering your answers in the tabs below.**Tabs:- Req 1A- Req 1B- Req 1C- Req 1D (current selection)- Req 2A- Req 2B**Question:**Calculate the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 using the Specific Identification method. Assume that the April 1 sale was selected one-fifth from the beginning inventory and four-fifths from the purchase of March 2. Assume that the sale of August 1 was selected from the purchase of June 30. (Round "Cost per Unit" answers to 2 decimal places.)**Table:****Specific Identification (Periodic)**| | Units | Cost per Unit | Total ||-----------------------------|-------|---------------|---------|| **Beginning Inventory** | | | $0 || **Purchases** | | | || March 2 | | | || June 30 | | | || **Total Purchases** | 0 | | 0 || **Goods Available for Sale**| | | || **Cost of Goods Sold** | | | || Units from Beginning Inventory | | | || Units from March 2 Purchase | | | || Units from June 30 Purchase | | | || **Total Cost of Goods Sold**| 0 | | 0 || **Ending Inventory** | | | |This table provides a framework for calculating inventory costs using the specific identification method and includes key transactions and categories for a comprehensive analysis.

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Description: Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided

Business

Accounting

Specific Identification (Periodic) Cost per Units Total Unit Beginning Inventory Purchases March 2 June 30 Total Purchases Goods Available for Sale Cost of Goods Sold Units from Beginning Inventory Units from March 2 Purchase Units from June 30 Purchase Total Cost of Goods Sold Ending Inventory %24

Specific Identification (Periodic) Cost per Units Total Unit Beginning Inventory Purchases March 2 June 30 Total Purchases Goods Available for Sale Cost of Goods Sold Units from Beginning Inventory Units from March 2 Purchase Units from June 30 Purchase Total Cost of Goods Sold Ending Inventory %24

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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