Chapter 6, Problem P6.28APGA

Accounting for inventory using the perpetual inventory system-FIFO, LIFO, and weighted-average

Learning Objective 2, 3
2. Ending Merch. Inv., $990
Fit Gym began January with merchandise inventory of 78 crates of vitamins that cost a total of $4,290. During the month, Fit Gym purchased and sold merchandise on account as follows:

Jan. 5	Purchase 		156 crates @ $   64 each

     13	Sale			180 crates @ $ 100 each

     18	Purchase		114 crates @ $   75 each

     26	Sale			150 crates @ $ 116 each

Requirements

1. Prepare a perpetual inventory record, using the FIFO inventory costing method, and determine the company’s cost of goods sold, ending merchandise inventory, and gross profit.
2. Prepare a perpetual inventory record, using the FIFO inventory costing method, and determine the company’s cost of goods sold, ending merchandise inventory, and gross profit.
3. Prepare a perpetual inventory record, using the FIFO inventory costing method, and determine the company’s cost of goods sold, ending merchandise inventory, and gross profit. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.)
4. If the business wanted to pay the least amount of income taxes possible, which method would it choose?