Application Assignment #3 - Chapter 7 LIFO/FIFO/Average Cost under Periodic and Perpetual Inventory Systems Spelling Company had the following transactions in connection with their inventory account during the month of August: PURCHASES SALES Units Unit Cost Units Unit Price 1-Aug 640 $ 8.20 4-Aug 240 $ 12.60 3-Aug 665 8.25 10-Aug 630 12.60 7-Aug 1215 8.45 12-Aug 815 13.00 11-Aug 575 8.50 17-Aug 630 13.00 16-Aug 550 8.55 20-Aug 710 13.50 23-Aug 620 8.60 25-Aug 575 13.50 4265 3600 Instructions: 1. Calculate the total number of ending inventory units. (This number will be used for all methods and assumptions) 2. a. Assuming that the company keeps perpetual records in units only; compute the inventory at August 31, using (1) LIFO; (2) FIFO and (3) average cost. (the periodic method) b. Assuming that perpetual records are kept in dollars, compute the inventory at August 31, using (1) LIFO; (2) FIFO and (3) average cost. (the perpetual method) c. Calculate the cost of goods sold Spelling Company should record for the month of August assuming the periodic inventory method for (1) LIFO; (2) FIFO and (3) average cost. d. Calculate the cost of goods sold Spelling Company should record for the month of August assuming the perpetual inventory method for (1) LIFO; (2) FIFO and (3) average cost. 3. Calculate the Gross Profit for LIFO and FIFO under the periodic method. You are to create worksheets within this document that calculate the requested information provide for above. I must see your work in order to give full credit. This is your opportunity to flex your Excel muscle and utilize this powerful software to help prepare calculations which are cumbersome and time consuming to do manually. I want to see good organization of data, good usage of Excel functions, and a logical flow of data for each solution area. Label your work appropriately. If I believe you have shared or copied your data/worksheets, I will provide a zero for the assignment. Do your own work please! Provide the Answers on the SOLUTIONS tab in the workbook (use cell references). But make sure this document also provides the backup information/calculation for each solution. Do not hard enter any number that is a calculation...use formulas and references throughout. **Present solutions rounded to two decimals. CHECK FIGURES: LIFO Perpetual Ending Inventory $ 5,471.00 LIFO Periodic Cost of Goods Sold $ 30,468.75 Average Cost Perpetual Ending Inventory $ 5,662.94

Solutions to Application Assignment #3 Student Name: 1. Total Ending Inventory Units: Ending Inventory (periodic): 2 a) LIFO FIFO Average Cost Ending Inventory (perpetual): 2 b) LIFO FIFO Average Cost Cost of Goods Sold (periodic): 2 c) LIFO FIFO Average Cost Cost of Goods Sold (perpetual): 2 d) LIFO FIFO Average Cost 3. Gross Profit LIFO FIFO