Warnerwoods 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

Totals

770

 units

530

 units

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

  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   

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.)