50.1K

Verified Solution

Link Copied!

Requirements 1 More Info 1. May 1 Beginning merchandise inventory 11 Purchase 2. Compute cost of goods sold and gross profit using the FIFO inventory costing method. Compute cost of goods sold and gross profit using the LIFO inventory costing method. Compute cost of goods sold and gross profit using the weighted average inventory costing method. (Round weighted average cost per unit to the nearest cent and all other amounts to the nearest dollar.) Which method results in the largest gross profit, and why? 23 Sale 16 tires @ 10 tires @ 12 tires @ 14 tires @ 18 tires @ $ $ $ $ $ 65 each 78 each 88 each 80 each 88 each 3. 26 Purchase . 29 Sale 4. 4. Assume that AB Tire Store completed the following perpetual Inventory transactions for a line of tires: (Click the icon to view the transactions.) Read the requirements.? Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Purchases Unit Cost Total Cost Cost of Goods Sold Unit Total Quantity Cost Cost Inventory on Hand Unit Total Quantity Cost Cost Date Quantity May 1 Totals Compute gross profit using the FIFO inventory costing method. Gross profit is using the FIFO inventory costing method. Requirement 2. Compute cost of goods sold and gross profit using the LIFO inventory costing method. Pri Begin by computing the cost of goods sold and cost of ending merchandise inventory using the LIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Purchases Cost of Goods Sold Inventory on Hand Unit Total Unit Total Unit Total Date Quantity Cost Cost Quantity Cost Cost Quantity Cost Cost May 1 Totals - F IN F IN . Compute gross profit using the LIFO inventory costing method. Gross profit is $ L u sing the LIFO inventory costing method. Requirement 3. Compute cost of goods sold and gross profit using the weighted average inventory costing method. (Round weighted average cost per unit to the nearest cent and all other amounts to the nearest dollar.) Begin by computing the cost of goods sold and cost of ending merchandise inventory using the weighted-average inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. Purchases Cost of Goods Sold Inventory on Hand Unit Cost Tatal Cost Unit Cost Total Cost Unit Cost Total Cost Quantity | Quantity Quantity Date May 1 Totals - - Compute gross profit using the weighted average inventory costing method. Gross profit is using the weighted average inventory costing method. Requirement 4. Which method results in the largest gross prolit, and why? The (1) method results in the largest gross profit because during times of (2) - inventory prices, this method will produce the (3) - cost of goods sold. 1: More Info May 1 Beginning merchandise inventory 11 Purchase 23 Sale 26 Purchase 29 Sale 16 tires @ S 10 tires @ S 12 tires @ S 14 tires @ S 18 tires @ S 65 each 78 each 88 each 80 each 88 each 2: Requirements 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method. 2. Compute cost of goods sold and gross profit using the LIFO inventory costing method. 3. Compute cost of goods sold and gross profit using the weighted-average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.) 4. Which method results in the largest gross profit, and why? (1) O FIFO OLIFO weighted average decreasing increasing highest lowest O

Answer & Explanation Solved by verified expert

See Answer