Venus Company uses a perpetual inventory system. It entered into the following calendar-year 2011 purchases and sales
Question:
Venus Company uses a perpetual inventory system. It entered into the following calendar-year 2011 purchases and sales transactions.
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Required
1. Compute cost of goods available for sale and the number of units available for sale.
2. Compute the number of units in ending inventory.
3. Compute the cost assigned to ending inventory using
(a) FIFO,
(b) LIFO,
(c) Specific identification—units sold consist of 600 units from beginning inventory and 165 units from the February 13 purchase, and
(d) Weighted average.
4. Compute gross profit earned by the company for each of the four costing methods in part 3.
Analysis Component
5. If the company’s manager earns a bonus based on a percent of gross profit, which method of inventory costing will the manager likelyprefer?
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:
1 Calculate cost of goods available for sale and units available for sale Beginning inventory 600 units 55 33000 Jan 10 450 units 56 25200 Feb 13 200 ...View the full answer
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
