Background Information:
Transactions Units Unit Cost
Beginning inventory, January 1, 2009 1,800 $5.00
Transactions during 2009:
a. Purchase, January 30 2,500 6.20
b. Sale, March 14 ($10 each) (1,450 )
c. Purchase, May 1 1,200 8.00
d. Sale, August 31 ($10 each) (1,900 )
Problem:
Compute the amount of goods available for sale, ending inventory,and cost of goods sold at December 31, 2009, under each of thefollowing inventory costing methods. For Specific Identification,assume that the March 14, 2009, sale was selected two-fifths fromthe beginning inventory and three-fifths from the purchase ofJanuary 30, 2009. And that the sale of August 31, 2009, wasselected from the remainder of the beginning inventory, with thebalance from the purchase of May 1, 2009. (Do not round Weightedaverage cost per unit. Round your final answers to the nearestdollar amount.)
Goods available for sale Ending inventory Cost of goods sold
a. Last-in, first-out. $34,100 $11,170 $22,930
b. Weighted average cost. $34,100 $13,330 $20,770
c. First-in, first-out. $34,100 $15,490 $18,610
d. Specific identification. $34,100 ? ?
Definition:
Specific Identification - The inventory costing method thatidentifies the cost of the specific item that was sold. I just need help with the specific identification part, I didall the other parts and got them right but I am confused with thewording on the specific information part. If any one could explain it to me and show me how to do thisproblem then I will award them lifesaver points/karma
Transactions Units Unit Cost
Beginning inventory, January 1, 2009 1,800 $5.00
Transactions during 2009:
a. Purchase, January 30 2,500 6.20
b. Sale, March 14 ($10 each) (1,450 )
c. Purchase, May 1 1,200 8.00
d. Sale, August 31 ($10 each) (1,900 )
Problem:
Compute the amount of goods available for sale, ending inventory,and cost of goods sold at December 31, 2009, under each of thefollowing inventory costing methods. For Specific Identification,assume that the March 14, 2009, sale was selected two-fifths fromthe beginning inventory and three-fifths from the purchase ofJanuary 30, 2009. And that the sale of August 31, 2009, wasselected from the remainder of the beginning inventory, with thebalance from the purchase of May 1, 2009. (Do not round Weightedaverage cost per unit. Round your final answers to the nearestdollar amount.)
Goods available for sale Ending inventory Cost of goods sold
a. Last-in, first-out. $34,100 $11,170 $22,930
b. Weighted average cost. $34,100 $13,330 $20,770
c. First-in, first-out. $34,100 $15,490 $18,610
d. Specific identification. $34,100 ? ?
Definition:
Related questions
PA7-1 Analyzing the Effects of Four Alternative Inventory Methods in a Periodic Inventory System [LO 7-3]
| Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. |
| Transactions | Units | Unit Cost | |||||||
| Beginning inventory, January 1 | 1,600 | $ | 45 | ||||||
| Transactions during the year: | |||||||||
| a. | Purchase, January 30 | 2,300 | 49 | ||||||
| b. | Sale, March 14 ($100 each) | (1,250 | ) | ||||||
| c. | Purchase, May 1 | 1,000 | 75 | ||||||
| d. | Sale, August 31 ($100 each) | (1,500 | ) | ||||||
| Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1. |
| Required: | |
| 1. | Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) |
| 2-a. | Of the four methods, which will result in the highest gross profit? | ||||||||
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| 2-b. | Of the four methods, which will result in the lowest income taxes? | ||||||||
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22.Altira Corporation uses a perpetual inventory system. Thefollowing transactions affected its merchandise inventory duringthe month of August 2016: |
| Aug.1 | Inventory onhandâ2,000 units; cost $6.10 each. |
| 8 | Purchased 10,000units for $5.50 each. |
| 14 | Sold 8,000 units for$12.00 each. |
| 18 | Purchased 6,000units for $5.00 each. |
| 25 | Sold 7,000 units for$11.00 each. |
| 31 | Inventory onhandâ3,000 units. |
| Required: |
Determine the inventory balance Altira would report in itsAugust 31, 2016, balance sheet and the cost of goods sold it wouldreport in its August 2016 income statement using each of thefollowing cost flow methods: (Round "Average Cost per Unit"to 2 decimal places.) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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