The Danson Co. uses the periodic inventory method and had the following inventory information available: # of Units Unit Cost ($) Total Cost ($) 1/1 Beg. Inventory 100 3 300 1/20 Purchase 500 4 2,000 7/25 Purchase 100 5 500 10/20 Purchase 300 6 1,800 1,000 4,600 Sales for the year were 650 units for $7,000 in total. Required: 1. Base on the above information, calculate (round to the nearest cent): The cost of the ending inventory for the following methods: FIFO (a) LIFO (b) Weighted Average (c) The cost of merchandise sold for the following methods: FIFO (d) LIFO (e) Weighted Average (f) The gross profit for the following methods: FIFO (g) LIFO (h) Weighted Average (i) 2. Which method produces the highest ending inventory? Which method generates the lowest gross profit? Which method do you like best and why
The Danson Co. uses the periodic inventory method and had the following inventory information available:
# of Units Unit Cost ($) Total Cost ($)
1/1 Beg. Inventory 100 3 300
1/20 Purchase 500 4 2,000
7/25 Purchase 100 5 500
10/20 Purchase 300 6 1,800
1,000 4,600
Sales for the year were 650 units for $7,000 in total.
Required:
1. Base on the above information, calculate (round to the nearest cent):
The cost of the ending inventory for the following methods:
FIFO (a) LIFO (b) Weighted Average (c)
The cost of merchandise sold for the following methods:
FIFO (d) LIFO (e) Weighted Average (f)
The gross profit for the following methods:
FIFO (g) LIFO (h) Weighted Average (i)
2. Which method produces the highest ending inventory? Which method generates the lowest gross profit? Which method do you like best and why?
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