Warnerwoods Company and Liverpool Company_Invetory Valuation

Warnerwoods Company and Liverpool Company_Invetory Valuation

Question

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





Totals

770

units

530

units










1.

Required:

1.

Compute cost of goods available for sale and the number of units available for sale.

Warnerwoods Company and Liverpool Company_Invetory Valuation

Warnerwoods Company and Liverpool Company_Invetory Valuation

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.)

Warnerwoods Company and Liverpool Company_Invetory Valuation

Warnerwoods Company and Liverpool Company_Invetory Valuation

Warnerwoods Company and Liverpool Company_Invetory Valuation

Warnerwoods Company and Liverpool Company_Invetory Valuation

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.)

Warnerwoods Company and Liverpool Company_Invetory Valuation

A physical inventory of Liverpool Company taken at December 31 reveals the following.

Per Unit


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


Warnerwoods Company and Liverpool Company_Invetory Valuation

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.)