### Cost Flow MethodsThe following three identical units of Item Alpha are purchased during April:| Date | Transaction | Units | Cost per Unit ||-------|-------------|-------|---------------|| Apr. 2 | Purchase | 1 | $76 || 14 | Purchase | 1 | $81 || 28 | Purchase | 1 | $83 || **Total** | | **3** | **$240** |- **Average cost per unit**: $80 ($240 ÷ 3 units)Assume that one unit is sold on April 30 for $132.**Determine the gross profit for April and ending inventory on April 30 using the:**1. **First-In, First-Out (FIFO) method**2. **Last-In, First-Out (LIFO) method**3. **Weighted Average Cost method**| Method | Gross Profit | Ending Inventory ||-----------------------------|--------------|------------------|| a. First-In, First-Out (FIFO) | $ | $ || b. Last-In, First-Out (LIFO) | $ | $ || c. Weighted Average Cost | $ | $ |**Instructions for Calculation:**1. **FIFO Method:** - First unit purchased is the first unit sold. - Calculate the cost of goods sold (COGS) using the first purchase price. - Subtract COGS from the sales price to determine gross profit. - Remaining inventory is valued at the cost of the latest purchases.2. **LIFO Method:** - Last unit purchased is the first unit sold. - Calculate the COGS using the last purchase price. - Subtract COGS from the sales price to determine gross profit. - Remaining inventory is valued at the cost of the earliest purchases.3. **Weighted Average Cost Method:** - Compute the average cost per unit. - Calculate COGS using the average cost. - Subtract COGS from the sales price to determine gross profit. - Ending inventory is valued at the average cost.Note: Fill in the table with calculated values once computations are performed. **Cost Flow Methods**The following three identical units of Item Alpha are purchased during April:| Date | Item Alpha | Units | Cost ||-------|------------|-------|------|| Apr. 2 | Purchase | 1 | $221 || Apr. 14 | Purchase | 1 | $223 || Apr. 28 | Purchase | 1 | $225 || **Total** | | 3 | $669 |Average cost per unit = $223 ($669 ÷ 3 units)Assume that one unit is sold on April 30 for $323.Determine the gross profit for April and ending inventory on April 30 using the following methods: - (a) First-in, first-out (FIFO)- (b) Last-in, first-out (LIFO)- (c) Weighted average cost**Gross Profit and Ending Inventory:**a. First-in, first-out (FIFO)- Gross Profit: $____- Ending Inventory: $____b. Last-in, first-out (LIFO)- Gross Profit: $____- Ending Inventory: $____c. Weighted average cost- Gross Profit: $____- Ending Inventory: $____The table above provides the purchases and costs for Item Alpha during the month of April, detailing the unit cost and total cost for three purchases. The task is to compute gross profits and ending inventory using different cost flow assumptions, specifically FIFO, LIFO, and weighted average cost.

Name: ### Cost Flow MethodsThe following three identical units of Item Alph
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Description: ### Cost Flow MethodsThe following three identical units of Item Alpha are purchased during April:| Date | Transaction | Units | Cost per Unit ||-------|-------------|-------|---------------|| Apr. 2 | Purchase | 1 | $76 || 14 |

FIFO (“First-In, First-Out”) is a method used to calculate inventory. It assumes that the oldest…

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The following three identical units of Item Alpha are purchased during April: Item Alpha Units Cost Apr. 2 Purchase 1 $76 14 Purchase 81 28 Purchase 1 83 Total $240 Average cost per unit $80 ($240 ÷ 3 units) Assume that one unit is sold on April 30 for $132. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost methods. 3,

The following three identical units of Item Alpha are purchased during April: Item Alpha Units Cost Apr. 2 Purchase 1 $76 14 Purchase 81 28 Purchase 1 83 Total $240 Average cost per unit $80 ($240 ÷ 3 units) Assume that one unit is sold on April 30 for $132. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost methods. 3,

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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