Question

The following merchandise inventory transactions occurred during the month of June for Heavy Metal Guitars (HMG):
June 6 Inventory on hand was 500 units at a cost of $100 each
June 11 Sold 100 units for $200 each
June 15 Purchased 200 units at $125 each
June 21 Sold 300 units for $225 each
June 27 Purchased 100 units for $75 each

Requirements
1. Assume HMG uses a periodic inventory system and compute the cost of goods sold for the month ended June 30 and ending inventory at June 30 using each of the following cost flow methods:
a. FIFO
b. LIFO
c. Weighted average cost
2. Using the information for item (1), calculate the inventory turnover ratio and average days in inventory for the month of June for each method.
3. Assume HMG uses the perpetual inventory system and compute the cost of goods sold for the month ended June 30 and ending inventory at June 30 using each of the following cost flow methods:
a. FIFO
b. LIFO



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  • CreatedSeptember 01, 2014
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