Problem 6-2A (Algo) Calculate ending inventory, cost of goods sold, sales revenue, and gross profit...
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Problem 6-2A (Algo) Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for four inventory methods (LO6-3, 6-4, 6-5)
George Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March. George Bicycle Shop uses a periodic inventory system.
Date
Transactions
Units
Unit Cost
Total Cost
March 1
Beginning inventory
20
$225
$4,500
March 5
Sale ($350 each)
15
March 9
Purchase
10
245
2,450
March 17
Sale ($400 each)
8
March 22
Purchase
10
255
2,550
March 27
Sale ($425 each)
12
March 30
Purchase
7
275
1,925
$11,425
For the specific identification method, the March 5 sale consists of bikes from beginning inventory, the March 17 sale consists of bikes from the March 9 purchase, and the March 27 sale consists of four bikes from beginning inventory and eight bikes from the March 22 purchase.
Required:
1. Calculate ending inventory and cost of goods sold at March 31, using the specific identification method. 2. Using FIFO, calculate ending inventory and cost of goods sold at March 31. 3. Using LIFO, calculate ending inventory and cost of goods sold at March 31. 4. Using weighted-average cost, calculate ending inventory and cost of goods sold at March 31. 5. Calculate sales revenue and gross profit under each of the four methods. 6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory? 7. If George Bicycle Shop chooses to report inventory using LIFO instead of FIFO, record the LIFO adjustment.
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