On Jan 1, Bike Mart had a beginning inventory of 20 bicycles which it purchased for...

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Accounting

On Jan 1, Bike Mart had a beginning inventory of 20 bicycleswhich it purchased for $365 each.
During January, the company purchases four more bicycles for$400 each. None were sold in January.
On February 15, the company purchases five more bicycles for$450 each.
Between February 16 and 28, Bike Mart sells 10 of thesebicycles.
a.) Calculate Bike Mart’s Ending Inventory Balance (in dollars)at the end of February and Cost of Goods Sold through Februaryusing the FIFO Method. (show all work.)
b.) Calculate Bike Mart’s Ending Inventory Balance (in dollars)at the end of February and Cost of Goods Sold through Februaryusing the Weighted Average Method. (show all work.)
c.) At the end of February, will Bike Mart’s Net Income(profits) on its Income Statement be higher if it uses the FIFO orWeighted Average Inventory Method? Why?
e.) At the end of February, will Bike Mart’s Inventory TurnoverRatio be higher if it uses the FIFO or Weighted Average InventoryMethod? Why?

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It is given that Beginning inventory 20 bicycles at 365 each 7300 Purchase during January 4 bicycles at 400 each 1600 Purchase during February 5 bicycles at 450 each 2250 Cost of goods available for sale Beginning inventory January Purchases February Purchases 7300 1600 2250 11150 Cost of goods sold Units sold 10 bicycles a FIFO As per FIFO method the units purchased first are sold first Therefore the goods are sold from the beginning inventory Here 10 units are sold The beginning inventory has a balance of 20 units Therefore all the 10 units sales are made from the beginning See Answer

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