Question: Army-Navy Surplus Ltd. began March 2017 with 70 tents that cost $20 each. During the month, Army-Navy Surplus made the following purchases at cost: Army-Navy

Army-Navy Surplus Ltd. began March 2017 with 70 tents that cost $20 each. During the month, Army-Navy Surplus made the following purchases at cost:

Army-Navy Surplus sold 320 tents (150 tents on March 22 and 170 tents on March 30), and at March 31 the ending inventory consists of 50 tents. The sale price of each tent was $45.
Requirements
1. Determine the cost of goods sold and ending inventory amounts for March under
(a) Weighted-average cost and
(b) FIFO cost assuming the perpetual system is used. Round weighted-average cost per unit to four decimal places, and round all other amounts to the nearest dollar.
2. Explain why cost of goods sold is highest under weighted-average cost. Be specific.
3. Prepare Army-Navy Surplus's income statement for March 2017. Report gross profit. Operating expenses totaled $4,000. Army-Navy Surplus uses weighted-average costing for inventory. The income tax rate is 21%.

March 4 19 25 100 tents $22 2,200 160 tents24 3,840 40 tents * 25- 1,000

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Req 1 Inventory Begin bal 70 units 20 1400 Purchases Mar 4 100 units 22 2200 19 160 units 24 3840 25 ... View full answer

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