Calculate cost of goods sold, ending inventory, and gross profit under each of the following inventory valuation methods

Calculate cost of goods sold, ending inventory, and gross profit under each of the following inventory valuation methods

Inventory valuation
methods: computations and concepts
. Wave Riders
Surfboard Company began business on January 1 of the current year. Purchases of
surfboards were as follows:

1/3:

100
boards @$125

3/17:

50
boards @ $130

5/9:

246
boards @140

7/3:

400
boards @ $150

10/23:

74
boards @$160

Wave Riders sold 710 boards at an
average price of $250 per board. The company uses a periodic inventory system.

Instructions

a. Calculate cost of
goods sold, ending inventory, and gross profit under each of the following
inventory valuation methods:

·
First-in, first-out

·
Last-in, first-out

·
Weighted average

b.
Which of the three methods would be chosen if management’s goal is to

(1) produce an
up-to-date inventory valuation on the balance sheet?

(2)
approximate the physical flow of a sand and gravel dealer?

(3) report low earnings (for tax purposes) for a separate electronics
company that has been experiencing
declining purchase prices?


Price: £ 45

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