P1 CPA Auto Supplies made the following purchases and sales of windshield wipers during March: Date Mar. 1 3 10 14 20 26 Beginning Purchase Sale Purchase Purchase Sale Quantity 10 70 50 25 100 125 Rate $6 8 $16 10 11 16 Required 1. Assuming CPA Auto Supplies uses a perpetual inventory system, calculate the cost of goods sold during March using (a) the moving-weighted-average-cost method and (b) FIFO. Round all average amounts to the nearest cent. 2. Now assume CPA Auto Supplies uses a periodic inventory system. Calculate the cost of goods sold during March using: (a) the weighted-average-cost method (b) FIFO. Round all average amounts to the nearest cent. (c) Calculate gross margin for both methods. Which is higher? 3. What do you notice when you compare the FIFO results from Requirement 1 and Requirement 2?

P1 CPA Auto Supplies made the following purchases and sales of windshield wipers during March: Date Mar. 1 3 10 14 20 26 Beginning Purchase Sale Purchase Purchase Sale Quantity 10 70 50 25 100 125 Rate $6 8 $16 10 11 16 Required 1. Assuming CPA Auto Supplies uses a perpetual inventory system, calculate the cost of goods sold during March using (a) the moving-weighted-average-cost method and (b) FIFO. Round all average amounts to the nearest cent. 2. Now assume CPA Auto Supplies uses a periodic inventory system. Calculate the cost of goods sold during March using: (a) the weighted-average-cost method (b) FIFO. Round all average amounts to the nearest cent. (c) Calculate gross margin for both methods. Which is higher? 3. What do you notice when you compare the FIFO results from Requirement 1 and Requirement 2?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 20GI

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