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?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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