Problem 5-3A Perpetual: Alternative cost flows LO P1

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Problem 5-3A Perpetual: Alternative cost flows LO P1

Montoure Company uses a perpetual inventory system. It entered into the following calendar-year 2015 purchases and sales transactions.

Date		Activities	Units Acquired at Cost						Units Sold at Retail
Jan.	1	Beginning inventory	600	units	@	$	35	per unit
Feb.	10	Purchase	300	units	@	$	32	per unit
Mar.	13	Purchase	150	units	@	$	20	per unit
Mar.	15	Sales								725	units	@	$	80	per unit
Aug.	21	Purchase	190	units	@	$	40	per unit
Sept.	5	Purchase	540	units	@	$	37	per unit
Sept.	10	Sales								730	units	@	$	80	per unit

		Totals	1,780	units						1,455	units

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

2.	Compute the number of units in ending inventory.

3.	Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification units sold consist of 600 units from beginning inventory, 200 from the February 10 purchase, 150 from the March 13 purchase, 140 from the August 21 purchase, and 365 from the September 5 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. (Round your average cost per unit to 2 decimal places.)

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WorksheetDifficulty: 3 Hard

Problem 5-3A Perpetual: Alternative cost flows LO P1Learning Objective: 05-P1 Compute inventory in a perpetual system using the methods of specific identification, FIFO, LIFO, and weighted average.

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