Refer to the information in Problem 6-12A. Assume that the company uses a perpetual inventory system. Also

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Refer to the information in Problem 6-12A. Assume that the company uses a perpetual inventory system. Also assume that monthly purchases of inventory occur on the first day of each month.
In Problem 6-12A
Sherman Office Supplies distributes office furniture. The company's fiscal year ends on December 31, 2014. On September 30, 2014, one department in the company had in inventory 20 office suites that cost $1,800 each. During the quarter, the department purchased merchandise on account as follows:
Units Unit Cost Total October November December 60 40 $111,000 76,000 $1,850 1,900 1,950 58,500

Sales for each month in the quarter were as follows:

Units Unit Selling Price Total October November December 50 20 $3,600 3,700 3,800 $180,000 34 74,000 129,200

Operating expenses in the quarter were $110,000.
Required
1. Determine the cost of the department's ending inventory at December 31, 2014, under
(a) Moving-weighted-average costing,
(b) FIFO costing.
2. Prepare the department's income statement for the quarter ended December 31, 2014, under each method described in Requirement 1. Show gross margin and operating income.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
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Related Book For  book-img-for-question

Accounting Volume 1

ISBN: 978-0132690096

9th Canadian edition

Authors: Charles T. Horngren, Walter T. Harrison, Jo Ann L. Johnston, Carol A. Meissner, Peter R. Norwood

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