E4A

Periodic Inventory System and Inventory Costing Methods

1. In chronological order, the inventory, purchases, and sales of a single product for a recent month are as follows.
2. June 1 Beginning Inventory 150 units $30
3. June 4 Purchase 400 units $33 per unit
4. June 12 Purchase 800 Units $36 per unit
5. June 16 Sale 1,300 units $60 per unit
6. June 24 Purchase 300 Units $39 pr unit
7. Using the periodic inventory system, compute the cost of ending inventory, cost of goods sold, and gross margin. Use the average-cost, FIFO, and LIFO inventory costing methods. (Round unit costs to cents and totals to dollars.)
8. ACCOUNTING CONNECTIONExplain the differences in gross margin produced by the three methods.

Attached is they way he wants us to do it. I am not certain I did it right....and I dont understand the 3rd question.

Periodic Inventory System and Inventory Costing Methods 1. Units Beginning inventory Purchases June 4th June 12th June 24th Cost of goods available for sale Price 150 $30.00 400 800 300 1,650 33.00 36.00 39.00 2. a. Average-cost method: Sales Cost of goods sold Cost of goods available for sale Ending inventory* Cost of goods sold Gross margin * Calculation for ending inventory Cost of goods available for sale Divided by total units available Cost per unit Multiplied by units in ending inventory Ending inventory b. $ 58,200 12,345 $ 58,200 1,650 $35.27 350 $ 12,345 FIFO method: Sales Cost of goods sold Cost of goods available for sale Ending inventory* Cost of goods sold Gross margin * Calculation for ending inventory 300 units from 6/24 x $39 $ 11,700 $ 58,200 13,500 50 units from 6/12 $36 $ 1,800 c. LIFO method: Sales Cost of goods sold Cost of goods available for sale Ending inventory* Cost of goods sold Gross margin Calculation for ending inventory Beginning inventory Ending Inventory $ 58,200 11,100 $4,500 150@$30 6,600 200@33 $ 11,100 Total Cost $ 4,500 $ $ 13,200 28,800 11,700 58,200 $ 78,000 $ 45,855 32,145 $ 78,000 $ 44,700 33,300 $ 11,700 $1,800 13,500 $78,000 $ 47,100 30,900 Beginning inventory Cost of goods available for sale Purchases Cost of goods available for sale Cost of goods sold Gross margin Sales Cost of gooCost of goods sold Selling andSales Cost of gooCost of goods available for sale Cost of gooGross margin Gross margIncome before income taxes Sales Selling and administrative expenses