P6-33A Accounting for inventory using the perpetual inventory system? FIFO, LIFO, and Weighted-Average, and comparing FIFO, LIFO, and Weighted-Average Decorative Steel began August with 55 units of iron inventory that cost $35 each. During August, the company completed the following inventory transactions: Units Unit Cost Unit Sale Price Aug. 3 Sale 45 $83 Aug. 8 Purchase 75 $52 Aug. 21 Sale 70 $85 Aug. 30 Purchase 10 $55 Requirements 1. Prepare a perpetual inventory record for the merchandise inventory using the FIFO inventory costing method. 2. Prepare a perpetual inventory record for the merchandise inventory using the LIFO inventory costing method. 3. Prepare a perpetual inventory record for the merchandise inventory using the weighted-average inventory costing method. 4. Determine the company's cost of goods sold for August using FIFO, LIFO, and weighted-average inventory costing methods. 5. Compute gross profit for August using FIFO, LIFO, and weighted-average inventory costing methods. 6. If the business wanted to maximize gross profit, which method would it select?

Perpetual Inventory Record: FIFO Date Quantity Aug. 1 3 8 21 30 Totals Purchases Unit Cost Total Cost Quantity Cost of Goods Sold Unit Total Cost Cost Quantity Inventory on Hand Unit Total Cost Cost Perpetual Inventory Record: LIFO Date Quantity Aug. 1 3 8 21 30 Totals Purchases Unit Total Cost Cost Quantity Cost of Goods Sold Unit Total Cost Cost Quantity Inventory on Hand Unit Total Cost Cost Perpetual Inventory Record: Weighted-Average Date Quantity Purchases Unit Cost Total Cost Cost of Goods Sold Unit Quantity Total Cost Cost Aug. 1 3 8 21 30 Totals Calculations: Weighted average cost per unit = Cost of goods available for sale / Number of units available (a) After the Aug. 8 purchase: = = = (b) After the Aug. 30 purchase: = = = Quantity Inventory on Hand Unit Cost Total Cost Determine the company's cost of goods sold for August using FIFO, LIFO and weighted-average inventory costing methods. Hint: look at the schedules that you just prepared for each method in the cost of goods sold section- the total cost. This is COGS. Compute gross profit for August using FIFO, LIFO, and weighted-average inventory costing methods. Calculations: Sales revenue = Number of units sold Sales price per unit Aug. 3 sale: = = Aug. 21 sale: = = Total sales revenue = Sales revenue from Aug. 3 sale + Sales revenue from Aug. 21 sale The sales revenue is the same for FIFO, LIFO and weighted - average = = FIFO Total Sales Revenue Cost of Goods Sold Gross Profit LIFO WeightedAverage hint: the total sales revenue will be the same for each section. If the business wanted to maximize gross profit, which method would it select