Warnerwoods Company and Liverpool Company_Invetory Valuation

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

 

170

units

@ $52.40/unit

    
 

Mar.

5

 

Purchase

 

260

units

@ $57.40/unit

    
 

Mar.

9

 

Sales

     

330

units

@$87.40/unit

 

Mar.

18

 

Purchase

 

120

units

@ $62.40/unit

    
 

Mar.

25

 

Purchase

 

220

units

@$64.40/unit

    
 

Mar.

29

 

Sales

     

200

units

@$97.40/unit

      

  

 
    

Totals

 

770

units

  

530

units

 
      



  



 

 

1.

 

 

 

Required:

1.

Compute cost of goods available for sale and the number of units available for sale.

  

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 100 units from beginning inventory and 230 units from the March 5 purchase; the March 29 sale consisted of 80 units from the March 18 purchase and 120 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 100 units from beginning inventory and 230 units from the March 5 purchase; the March 29 sale consisted of 80 units from the March 18 purchase and 120 units from the March 25 purchase.(Round your final answers to two decimal places.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A physical inventory of Liverpool Company taken at December 31 reveals the following.

 

  

Per Unit

  

Item

Units

Cost

Market

Audio equipment

     

Receivers

349

$

104

$

94

CD players

264

 

125

 

115

MP3 players

330

 

100

 

90

Speakers

208

 

45

 

56

Video equipment

     

Handheld LCDs

484

 

129

 

154

VCRs

295

 

88

 

97

Camcorders

216

 

326

 

314

Car audio equipment

     

Satellite radios

189

 

88

 

74

CD/MP3 radios

174

 

109

 

101


 

 

 

2.

If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.(If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

    • Posted: 6 years ago
    Warnerwoods Company and Liverpool Company_Invetory Valuation

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