FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text: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?
Transcribed Image Text:a) Weighted-Average
b) FIFO
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