The following information pertains to Mason Company for 2016:
Beginning inventory 96 units @ $ 20 Units purchased 318 units @ $ 30
Ending inventory consisted of 32 units. Mason sold 382 units at $60 each. All purchases and sales were made with cash. Operating expenses amounted to $3,000
1. Compute the gross margin for Mason Company using the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. (Round cost per unit to 3 decimal places and final answers to the nearest whole dollar amount.)
2. What is the amount of net income using FIFO, LIFO, and weighted average? (Ignore income tax considerations.) (Round cost per unit to 3 decimal places and other intermediate answer and final answers to the nearest whole dollar amount.)
3. Compute the amount of ending inventory using (1) FIFO, (2) LIFO, and (3) weighted average. (Round cost per unit to 3 decimal places and final answers to the nearest whole dollar amount.)
| The following information pertains to Mason Company for 2016:
3. Compute the amount of ending inventory using (1) FIFO, (2) LIFO, and (3) weighted average. (Round cost per unit to 3 decimal places and final answers to the nearest whole dollar amount.) |
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Related questions
Assume that Dunk Coffee Shop completed the following periodic inventory transactions for a line of merchandiseâ inventory:
| Jun. | 1 | Beginning merchandise inventory | 25 | units @ | $22 | each |
| 12 | Purchase | 3 | units @ | $24 | each | |
| 20 | Sale | 14 | units @ | $34 | each | |
| 24 | Purchase | 17 | units @ | $28 | each | |
| 29 | Sale | 20 | units @ | $34 | each |
| 1. | Compute ending merchandiseâ inventory, cost of goodsâ sold, and gross profit using the FIFO inventory costing method. |
| 2. | Compute ending merchandiseâ inventory, cost of goodsâ sold, and gross profit using the LIFO inventory costing method. |
| 3. | Compute ending merchandiseâ inventory, cost of goodsâ sold, and gross profit using theâ weighted-average inventory costing method.â (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearestâ dollar.) |
QUESTION: Compute ending merchandiseâ inventory, cost of goodsâ sold, and gross profit using theâ (1) FIFO inventory costingâ method, (2) LIFO inventory costingâ method, andâ (3) weighted-average inventory costing method.â (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearestâ dollar.)
Begin by determining ending merchandise inventory and cost of goods sold under each of the three methods.
| Requirement 1. | ||
| FIFO | ||
| Plus: | ||
| Less: | ||
| Cost of goods sold | ||
| Requirement 2. |
| LIFO |
| Requirement 3. |
| Weighted-Average |
Now compute the gross profit under each inventory costing method.
| Requirement 1. | ||
| FIFO | ||
| Sales Revenue | ||
| Cost of Goods Sold | ||
| Gross Profit | ||
| Requirement 2. |
| LIFO |
| . | ||||
| Requirement 3. |
| Weighted-Average |
E7-6 Analyzing and Interpreting the Financial Statement Effects of Periodic FIFO, LIFO, and Weighted Average Cost [LO 7-3]
| Orion Iron Corp. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, 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 | ||||
| a. Inventory, Beginning | 350 | $ | 14 | |||
| For the year: | ||||||
| b. Purchase, April 11 | 950 | 12 | ||||
| c. Purchase, June 1 | 700 | 15 | ||||
| d. Sale, May 1 (sold for $42 per unit) | 350 | |||||
| e. Sale, July 3 (sold for $42 per unit) | 610 | |||||
| f. Operating expenses (excluding income tax expense), $18,000 | ||||||
| Required: |
| 1. | Calculate the number and cost of goods available for sale. |
| 2. | Calculate the number of units in ending inventory. |
| 3. | Compute the cost of ending inventory and cost of goods sold under (a) FIFO, (b) LIFO, and (c) weighted average cost. (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) |
| 4. | Prepare an Income Statement that shows the FIFO method, LIFO method and weighted average method. |
| 6. | Which inventory costing method minimizes income taxes? | ||||||
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Periodic Inventory Using FIFO, LIFO, and Weighted Average CostMethods
The units of an item available for sale during the year were asfollows:
| Jan. 1 | Inventory | 15 | units at $47 | $705 |
| July 7 | Purchase | 15 | units at $50 | 750 |
| Nov. 23 | Purchase | 15 | units at $52 | 780 |
| Available forsale | 45 | units | $2,235 | |
There are 22 units of the item in the physical inventory atDecember 31. The periodic inventory system is used. Determine theinventory cost using (a) the first-in, first-out (FIFO) method; (b)the last-in, first-out (LIFO) method; and (c) the weighted averagecost method (round per unit cost to two decimal places and yourfinal answer to the nearest whole dollar).
| a. | First-in, first-out (FIFO) | $ |
| b. | Last-in, first-out (LIFO) | $ |
| c. | Weighted average cost |
