Illustrative problem page 372

Do not do part (c) of question 1.

Instructions

1. Determine the cost of inventory on December 31, 20Y2, using the perpetual inven- tory system and each of the following inventory costing methods:

a. first-in, first-out

b. last-in, first-out

c. weighted average

2. Determine the cost of inventory on December 31, 20Y2, using the periodic inventory system and each of the following inventory costing methods:

a. first-in, first-out

b. last-in, first-out

c. weighted average cost

3. (Appendix) Assume that during the fiscal year ended December 31, 20Y2, sales were $530,000 and the estimated gross profit rate was 36%. Estimate the ending inventory at December 31, 20Y2, using the gross profit method.

Stewart Co.'s beginning inventory and purchases during the year ended December 31, 20Y2, were as follows: Unit Unit Cost Total Cost January 1 Inventory 1,000 $50.00 $ 50,000 March 10 Purchase 3,000 52.00 156,000 June 25 Sold 1,600 units August 30 Purchase 2,600 55.00 143,000 October 5 Sold 4,000 units November 26 Purchase 1,000 57.68 57,680 December 31 Sold 800 units Total 7,600 $406,680