Unisource Industrial Supplies distributes industrial equipment. The company's fiscal year ends on December 31, 2014. One department
Question:
Unisource Industrial Supplies distributes industrial equipment. The company's fiscal year ends on December 31, 2014. One department in the company had 50 items that cost $540 each on hand at October 1, 2014. During the quarter, the department purchased merchandise on account as shown here.
Sales for each month in the quarter were as follows:
Operating expenses in the quarter were $80,000.
Required
1. Determine the cost of the department's ending inventory at December 31, 2014, under
(a) The weighted-average-cost method,
(b) The FIFO method. Assume the company uses the periodic inventory system and determines cost of goods sold at the end of the quarter.
2. Prepare the department's income statement for the quarter ended December 31, 2014, under each method described in Requirement 1. Show totals for gross margin and operating income.
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 =...
Step by Step Answer:
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