Answered: Cost Flow Methods The following three…

Financial Accounting

15th Edition

ISBN:9781337272124

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

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

Chapter7: Inventories

Section: Chapter Questions

Problem 1PEA: The following three identical units of Item A are purchased during April: Assume that one unit is...

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Cost Flow Methods

The following three identical units of Item LO3V are purchased during April:

	Item Beta	Units	Cost
April 2	Purchase	1	$190
April 15	Purchase	1	191
April 20	Purchase	1	192
Total		3	$573
Average cost per unit			$191	($573 ÷ 3 units)

Assume that one unit is sold on April 27 for $267. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method.

	Gross Profit	Ending Inventory
a. First-in, first-out (FIFO)	$fill in the blank 1	$fill in the blank 2
b. Last-in, first-out (LIFO)	$fill in the blank 3	$fill in the blank 4
c. Weighted average cost	$fill in the blank 5	$fill in the blank 6

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