Warnerwoods Company and Liverpool Company_Invetory Valuation
Operationalizing Constructs
June 17, 2020Florida’s State Panther
June 17, 2020Warnerwoods Company and Liverpool Company_Invetory Valuation
| 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 | 170 | units | @ $52.40/unit | |||||||
| Mar. | 5 | Purchase | 260 | units | @ $57.40/unit | |||||||
| Mar. | 9 | Sales | 330 | units | @$87.40/unit | |||||||
| Mar. | 18 | Purchase | 120 | units | @ $62.40/unit | |||||||
| Mar. | 25 | Purchase | 220 | units | @$64.40/unit | |||||||
| Mar. | 29 | Sales | 200 | units | @$97.40/unit | |||||||
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| Totals | 770 | units | 530 | units | ||||||||
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| Required: | |
| 1. | Compute cost of goods available for sale and the number of units available for sale. |
| 3. | Compute the cost assigned to ending inventory using(a)FIFO,(b)LIFO,(c)weighted average, and(d)specific identification. For specific identification, the March 9 sale consisted of 100 units from beginning inventory and 230 units from the March 5 purchase; the March 29 sale consisted of 80 units from the March 18 purchase and 120 units from the March 25 purchase.(Round your average cost per unit to 2 decimal places.) |
| 4. | Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 100 units from beginning inventory and 230 units from the March 5 purchase; the March 29 sale consisted of 80 units from the March 18 purchase and 120 units from the March 25 purchase.(Round your final answers to two decimal places.) |
| A physical inventory of Liverpool Company taken at December 31 reveals the following. |
| Per Unit | |||||
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| Item | Units | Cost | Market | ||
| Audio equipment | |||||
| Receivers | 349 | $ | 104 | $ | 94 |
| CD players | 264 | 125 | 115 | ||
| MP3 players | 330 | 100 | 90 | ||
| Speakers | 208 | 45 | 56 | ||
| Video equipment | |||||
| Handheld LCDs | 484 | 129 | 154 | ||
| VCRs | 295 | 88 | 97 | ||
| Camcorders | 216 | 326 | 314 | ||
| Car audio equipment | |||||
| Satellite radios | 189 | 88 | 74 | ||
| CD/MP3 radios | 174 | 109 | 101 | ||
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| 2. | If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.(If no entry is required for a particular transaction, select No journal entry required in the first account field.) |
