Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date Activiies Units Acquired at Cost Units Sold at Recall
Mar. 1 Beginning inventory 60 units $50.20 per unit
Mar. 5 Purchase 205 units $55.20 per unit
Mar. 9 Sales 220 units $85.20 per unit
Mar. 18 Purchase 65 units $60.20 per unit
Mar. 25 Purchase 110 units $62.20 per unit
Mar. 29 Sales 90 units $95.20 units
Total 440 units 310 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, units sold consist of 600 units from beginning inventory, 300 from the February 10 purchase, 200 from the March 13 purchase, 50 from the August 21 purchase, and 250 from the September 5 purchase.
4. Compute gross profit earned by the company for each of the four costing methods.

Warnerwoods Company

Perpetual Inventory System:

1. Cost of Goods Available for Sale and Units Available for Sale:

Mar. 1 Beginning inventory     60 units $50.20 per unit      $3,012

Mar. 5 Purchase                   205 units $55.20 per unit        11,316

Mar. 18 Purchase                    65 units $60.20 per unit        3,913

Mar. 25 Purchase                  110 units $62.20 per unit        6,842

Available for Sale                440 units            Cost =      $25,083

2. The number of units in ending inventory:

Units Available for Sale 440

Subtract units sold         310

Ending Inventory          130 units

3. The Cost assigned to ending inventory using:

a) FIFO: Ending Inventory

20 units at $60.20 per unit   = $1,204

110 units at $62.20 per unit  =  6,842

Ending Inventory                    $8,046

b) LIFO: Ending Inventory

Mar. 1 Beginning Inventory 45 units $50.20 per unit = $2,259

Mar. 18 Purchase 65 units $60.20 per unit  =                    3,913  

Mar. 25 Purchase 20 units $62.20 per unit   =                  1,244

Ending Inventory 130 units    Cost  = $7,416

c) Weighted Average: Ending Inventory

Cost of Goods Available for Sale divided by units available for sale

= $25,083/440 = $57 per unit

Ending Inventory = $57 x 130 = $7,410

d) Specific Identification: Ending Inventory

This cannot be answered from the  information provided in the question:

4. Gross Profit for each costing method:

                        FIFO             LIFO         WEIGHTED       SPECIFIC

                                                     AVERAGE        IDENTIFICATION

Sales               $27,312         $27,312         $27,312            $27,312

Cost of Sales    17,037           17,667            17,670

Gross Profit   $10,275          $9,645          $9,642

Explanation:

a) Sales:

Mar. 9 Sales 220 units $85.20 per unit = $18,744

Mar. 29 Sales 90 units $95.20 units   =       8,568

Total = $27,312

b) Cost of Sales:

i) FIFO

Mar 1. Beginning inventory 60 units $50.20 per unit  = $3,012

Mar. 5 Purchase 205 units $55.20 per unit      =            11,316

Mar. 18 Purchase 45 units $60.20                     =            2,709

Cost of Sales = $17,037

ii) LIFO:

Mar. 1 Beginning inventory 15 units $50.20 per unit  = $753

Mar. 5 Purchase 205 units $55.20 per unit   = $11,316

Mar. 25 Purchase 90 units $62.20 per unit   = $5,598

Cost of Sales = $17,667

iii) Weighted Average:

Cost of Sales = $57 x 310 = $17,670

c) Calculations under the specific identification cannot be made because of the figures given under this method.

1: b     the use of non-standard grammar

2: c     strong and willful.

its correct i took the test have a nice day: )