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Problem7 1a
Problem7 1a
Problem7 1a
The
following
three
identical
units of
Item
Alpha are
purchase
d during
April:
Item
Units
Alpha
Apr. 2 Purchase 1
14 Purchase 1
28 Purchase 1
Total 3
Average cost per
unit
Assume
that one
unit is
sold on
April 30
for $132.
Determin
e 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.
Gross Ending
Profit Inventory
a. First-in,
first-out
(FIFO)
b. Last-in,
first-out
(LIFO)
c. Weight
ed
average
cost
Gross profit Cost of Ending inventory
1 $76.00
1 $81.00
1 $83.00
Cost of goo 3
Units (A) 3
Total Cost (B) $240
Average Co(C=B/A) $80.00
FIFO
Total Units Available for sale 3
Units Sold 1
Closing Stock in Units 2
Valuation
Ending Inv 1@
1@
Valuation
Ending Inv 1@
1@
Valuation
Ending Inv 2@
(Total Purchase
Cost of Go
and opening stock Minus Closing Stock) $80
FIFO LIFO
Sales reve $132 $132
Less: Cost $76 $83
Gross profi $56 $49
ing inventory
value
$0
$76
$81
$83
$240.00
$83.00 $83.00
$81.00 $81.00
$164.00
$76.00
$76.00 $76
$81.00 $81
$157
$83
$80.00 $160
$160
Weighted Average
$132
$80
$52