The beginning inventory for RTE Office Supplies and data on purchases and sales for a three-month period

The beginning inventory for RTE Office Supplies and data on purchases and sales for a three-month period are shown in Problem 7-1A.

Instructions

1. Determine the inventory on August 31, 2014, and the cost of goods sold for the threemonth
period, using the first-in, first-out method and the periodic inventory system.

2. Determine the inventory on August 31, 2014, and the cost of goods sold for the threemonth
period, using the last-in, first-out method and the periodic inventory system.

3. Determine the inventory on August 31, 2014, and the cost of goods sold for the threemonth
period, using the weighted average cost method and the periodic inventory
system. Round the weighted average unit cost to the nearest cent.

4. Compare the gross profit and the August 31, 2014, inventories, using the following column headings:


FIFO LIFO Weighted Average
Sales
Cost of merchandise sold
Gross profit
Inventory, August 31, 2014




Answer:





3. Weighted Average Cost Method
Merchandise inventory, August 31, 2014………………… $ 26,160
Cost of merchandise sold…………………………………… 291,240
Supporting computations
Weighted Average Unit Cost = Total Cost of Merchandise Available for Sale
Units Available for Sale
= $317,400
9,100 units = $34.88 per unit (rounded)
Merchandise inventory:
750 units × $34.88 = $26,160
Cost of merchandise sold:
Beginning inventory, June 1, 2014………………………… $ 15,000

Purchases……………………………………………………… 302,400
Merchandise available for sale……………………………… $317,400
Less ending inventory, August 31, 2014…………………… 26,160
Cost of merchandise sold…………………………………… $291,240





4. Weighted
FIFO LIFO Average
Sales $483,800 $483,800 $483,800
Cost of merchandise sold 290,450 293,900 291,240
Gross profit $193,350 $189,900 $192,560


1. First-In, First-Out Method
Merchandise inventory, August 31, 2014………………………………… $ 26,950
Cost of merchandise sold…………………………………………………… 290,450
Supporting computations
Merchandise inventory:
500 units @ $36.00 $18,000
250 units @ $35.80 8,950
750 units $26,950
Cost of merchandise sold:
Beginning inventory, June 1, 2014………………………………………… $ 15,000
Purchases………………………………………………………………….. 302,400
Merchandise available for sale…………………………………………. $317,400
Less ending inventory, August 31, 2014…………………………………… 26,950
Cost of merchandise sold………………………………………………… $290,450
2. Last-In, First-Out Method
Merchandise inventory, August 31, 2014………………………………… $ 23,500
Cost of merchandise sold…………………………………………………… 293,900
Supporting computations
Merchandise inventory:
500 units @ $30.00……………………………………………………… $15,000
250 units @ $34.00……………………………………………………… 8,500
750 units…………………………………………………………………… $23,500
Cost of merchandise sold:
Beginning inventory, June 1, 2014………………………………………… $ 15,000
Purchases………………………………………………………………….. 302,400
Merchandise available for sale…………………………………………. $317,400
Less ending inventory, August 31, 2014…………………………………… 23,500
Cost of merchandise sold………………………………………………… $293,900

Inventory, August 31, 2014 $ 26,950 $ 23,500 $ 26,160

The beginning inventory for RTE Office Supplies and data on purchases and sales for a three-month period

The beginning inventory for RTE Office Supplies and data on purchases and sales for a three-month period are shown in Problem 7-1A.

Instructions

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual
inventory record similar to the one illustrated in Exhibit 5, using the weighted average
cost method.

2. Determine the total sales, the total cost of merchandise sold, and the gross profit from
sales for the period.

3. Determine the ending inventory cost as of August 31, 2014


Answer:


Date
Purchases Cost of Merchandise Sold Inventory
Quantity
Unit
Cost
Total
Cost Quantity Unit Cost
Total
Cost Quantity Unit Cost
Total
Cost
June 1 500 30.00 15,000
10 1,500 34.00 51,000 2,000 33.00 66,000
28 750 33.00 24,750 1,250 33.00 41,250
30 250 33.00 8,250 1,000 33.00 33,000
July 5 100 33.00 3,300 900 33.00 29,700
10 3,600 35.00 126,000 4,500 34.60 155,700
16 1,800 34.60 62,280 2,700 34.60 93,420
28 1,700 34.60 58,820 1,000 34.60 34,600
Aug. 5 3,000 35.80 107,400 4,000 35.50 142,000
14 2,000 35.50 71,000 2,000 35.50 71,000
25 500 36.00 18,000 2,500 35.60 89,000
30 1,750 35.60 62,300 750 35.60 26,700
31 Balances 290,700 26,700
1.
2. Total sales……………………………………………………………$483,800*
Total cost of merchandise sold………………………………… 290,700
Gross profit………………………………………………………… $193,100
*$483,800 = $37,500 + $13,000 + $5,500 + $100,800 + $102,000 + $120,000 + $105,000



3. $26,700 (750 units × $35.60)

The beginning inventory at RTE Office Supplies and data on purchases and sales for a three-month period are shown

The beginning inventory at RTE Office Supplies and data on purchases and sales for a three-month period are shown in Problem 7-1A.

Instructions
1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual
inventory record similar to the one illustrated in Exhibit 4, using the last-in, first-out
method.

2. Determine the total sales, the total cost of merchandise sold, and the gross profit from
sales for the period.

3. Determine the ending inventory cost as of August 31, 2014.


Answer:




2. Total sales……………………………………………………………………………
Total cost of merchandise sold……………………………………………………
$483,800 *
293,900
Gross profit…………………………………………………………………………… $189,900
*$483,800 = $37,500 + $13,000 + $5,500 + $100,800 + $102,000 + $120,000 + $105,000


3. $23,500 = [(500 units × $30) + (250 units × $34)] = $15,000 + $8,500

Purchases Cost of Merchandise Sold Inventory
Quantity
Unit
Cost
Total
Cost Quantity
Unit
Cost
Total
Cost Quantity
Unit
Cost
Total
Cost
June 1 500 30.00 15,000
10 1,500 34.00 51,000 500
1,500
30.00
34.00
15,000
51,000
28 750 34.00 25,500 500
750
30.00
34.00
15,000
25,500
30 250 34.00 8,500 500
500
30.00
34.00
15,000
17,000
July 5 100 34.00 3,400 500
400
30.00
34.00
15,000
13,600
10 3,600 35.00 126,000 500
400
3,600
30.00
34.00
35.00
15,000
13,600
126,000
16 1,800 35.00 63,000 500
400
1,800
30.00
34.00
35.00
15,000
13,600
63,000
28 1,700 35.00 59,500 500
400
100
30.00
34.00
35.00
15,000
13,600
3,500
Aug. 5 3,000 35.80 107,400 500
400
100
3,000
30.00
34.00
35.00
35.80
15,000
13,600
3,500
107,400
14 2,000 35.80 71,600 500
400
100
1,000
30.00
34.00
35.00
35.80
15,000
13,600
3,500
35,800
25 500 36.00 18,000 500
400
100
1,000
500
30.00
34.00
35.00
35.80
36.00
15,000
13,600
3,500
35,800
18,000
30 500
1,000
100
150
36.00
35.80
35.00
34.00
18,000
35,800
3,500
5,100
500
250
30.00
34.00
15,000
8,500
31 Balances 293,900 23,500
1