Accounting

| June 13, 2016

Question
Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
Date Activities Units Acquired at Cost Units Sold at Retail
Mar. 1 Beginning inventory 100 units @ $51.00/unit
Mar. 5 Purchase 225 units @ $56.00/unit
Mar. 9 Sales 260 units @ $86.00/unit
Mar. 18 Purchase 85 units @ $61.00/unit
Mar. 25 Purchase 150 units @ $63.00/unit
Mar. 29 Sales 130 units @ $96.00/unit
Totals 560 units 390 units
Required:
1.
Compute cost of goods available for sale and the number of units available for sale.

2. Compute the number of units in ending inventory.
3.
Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d)specific identification. For specific identification, the March 9 sale consisted of 65 units from beginning inventory and 195 units from the March 5 purchase; the March 29 sale consisted of 45 units from the March 18 purchase and 85 units from the March 25 purchase. (Round your average cost per unit to 2 decimal places.)

4.
Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 65 units from beginning inventory and 195 units from the March 5 purchase; the March 29 sale consisted of 45 units from the March 18 purchase and 85 units from the March 25 purchase. (Round average cost per unit to 2 decimal places.)

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