Ending inventory: $2,200 Cost of goods sold: $7,820
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Total cost of goods available for sale = Cost of goods sold + Ending inventory Total cost of goods available for sale = $7,820 + $2,200 Total cost of goods available for sale = $10,020 Show more…
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Text: Big Fish Tackle Co. Ltd. reports the following inventory transactions for its fishing rods for the month of April. The company uses a perpetual inventory system. Date Explanation Units Unit Cost/Price Total Cost Apr. 1 Beginning inventory 50 $230 $11,500 Apr. 6 Purchases 35 $240 $8,400 Apr. 9 Sales (55) $350 Apr. 14 Purchases 40 $245 $9,800 Apr. 20 Sales (50) $360 Apr. 28 Purchases 30 $250 $7,500 Instructions: Using FIFO, determine the cost of goods sold and the cost of ending inventory. Record journal entries for the sales transactions on April 9 and April 20. Assume that Big Fish Tackle wants to change to the average cost formula. Explain what guidelines the company must consider before making this change. If the company does change to the average cost formula and prices continue to rise, explain whether you expect the cost of goods sold and ending inventory amounts to be higher or lower than these amounts when using FIFO.
Akash M.
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 220 units @ $53.40 per unit Mar. 5 Purchase 285 units @ $58.40 per unit Mar. 9 Sales 380 units @ $88.40 per unit Mar. 18 Purchase 145 units @ $63.40 per unit Mar. 25 Purchase 270 units @ $65.40 per unit Mar. 29 Sales 250 units @ $98.40 per unit Totals 920 units 630 units Required: 1. Compute cost of goods available for sale and the number of units available for sale. Cost of Goods Available for Sale # of units Cost per Unit Cost of Goods Available for Sale Beginning inventory Purchases: March 5 March 18 March 25 Total
Adi S.
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 130 units @ $51.60 per unit Mar. 5 Purchase 240 units @ $56.60 per unit Mar. 9 Sales 290 units @ $86.60 per unit Mar. 18 Purchase 100 units @ $61.60 per unit Mar. 25 Purchase 180 units @ $63.60 per unit Mar. 29 Sales 160 units @ $96.60 per unit Totals 650 units 450 units 4. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 80 units from beginning inventory and 210 units from the March 5 purchase; the March 29 sale consisted of 60 units from the March 18 purchase and 100 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)
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