Answered: Calculate the gross profit using: 3.1.…

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Inventories

Section: Chapter Questions

Problem 6.5BE: Periodic inventory using FIFO, UFO, and weighted average cost methods The units of an item available...

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QUESTION 3

EPR Industries is a wholesaler that distributes boxes of toy cars to local shops. The
company has a 31 December financial year end.

The following inventory transactions occurred during January 2018:

January Purchases January Sales
1 220 boxes at R220 10 220 boxes at R286
3 440 boxes at R231 14 110 boxes at R286
16 110 boxes at R236 18 220 boxes at R264
25 660 boxes at R249 24 110 boxes at R286
28 220 boxes at R253 26 220 boxes at R264
29 220 boxes at R264 27 330 boxes at R308
31 330 boxes at R308

There was no opening inventory in January 2018.
Required:
Calculate the gross profit using:
3.1. FIFO method (10)

3.2. Weighted average method (10)

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