Problem 6-2B (Algo) Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for four inventory methods (LO6-3, 6-4, 6-5) Richie's Tennis Shop has the following transactions related to its top-selling Wilson tennis racket for the month of August. Richie's Tennis Shop uses a periodic inventory system. Date August 1 August 4 August 11 August 13 August 20 August 26 August 29 Transactions Beginning inventory Sale ($160 each) Purchase Sale ($175 each) Purchase Sale ($185 each) Purchase Units 8 5 10 8 10 11 11 Unit Cost $147 137 127 117 Total Cost $1,176 1,370 1,270 1,287 $5,103 For the specific identification method, the August 4 sale consists of rackets from beginning inventory, the August 13 sale consists of rackets from the August 11 purchase, and the August 26 sale consists of one racket from beginning inventory and 10 rackets from the August 20 purchase. Required: 1. Calculate ending inventory and cost of goods sold at August 31, using the specific identification method. 2. Using FIFO, calculate ending inventory and cost of goods sold at August 31. 3. Using LIFO, calculate ending inventory and cost of goods sold at August 31. 4. Using weighted-average cost, calculate ending inventory and cost of goods sold at August 31. 5. Calculate sales revenue and gross profit under each the four methods. 6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory? 7. If Richie's chooses to report inventory using LIFO, record the LIFO adjustment.
Problem 6-2B (Algo) Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for four inventory methods (LO6-3, 6-4, 6-5) Richie's Tennis Shop has the following transactions related to its top-selling Wilson tennis racket for the month of August. Richie's Tennis Shop uses a periodic inventory system. Date August 1 August 4 August 11 August 13 August 20 August 26 August 29 Transactions Beginning inventory Sale ($160 each) Purchase Sale ($175 each) Purchase Sale ($185 each) Purchase Units 8 5 10 8 10 11 11 Unit Cost $147 137 127 117 Total Cost $1,176 1,370 1,270 1,287 $5,103 For the specific identification method, the August 4 sale consists of rackets from beginning inventory, the August 13 sale consists of rackets from the August 11 purchase, and the August 26 sale consists of one racket from beginning inventory and 10 rackets from the August 20 purchase. Required: 1. Calculate ending inventory and cost of goods sold at August 31, using the specific identification method. 2. Using FIFO, calculate ending inventory and cost of goods sold at August 31. 3. Using LIFO, calculate ending inventory and cost of goods sold at August 31. 4. Using weighted-average cost, calculate ending inventory and cost of goods sold at August 31. 5. Calculate sales revenue and gross profit under each the four methods. 6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory? 7. If Richie's chooses to report inventory using LIFO, record the LIFO adjustment.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter5: Inventories And Cost Of Goods Sold
Section: Chapter Questions
Problem 5.24MCE
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Transcribed Image Text:Problem 6-2B (Algo) Calculate ending inventory, cost of goods sold, sales revenue, and gross profit for
four inventory methods (LO6-3, 6-4, 6-5)
Richie's Tennis Shop has the following transactions related to its top-selling Wilson tennis racket for the month of August. Richie's
Tennis Shop uses a periodic inventory system.
Date
August 1
August 4
August 11
August 13
August 20
August 26
August 29 Purchase
Transactions
Beginning inventory
Sale ($160 each)
Purchase
Sale ($175 each)
Purchase
Sale ($185 each)
Units
8
5
10
8
10
11
11
Unit Cost
$147
137
127
117
For the specific identification method, the August 4 sale consists of rackets from beginning inventory, the August 13 sale consists of
rackets from the August 11 purchase, and the August 26 sale consists of one racket from beginning inventory and 10 rackets from the
August 20 purchase.
Required 1 Required 2
Required:
1. Calculate ending inventory and cost of goods sold at August 31, using the specific identification method.
2. Using FIFO, calculate ending inventory and cost of goods sold at August 31.
3. Using LIFO, calculate ending inventory and cost of goods sold at August 31.
Total Cost
$1,176
1,370
1,270
1,287
$5,103
4. Using weighted-average cost, calculate ending inventory and cost of goods sold at August 31.
5. Calculate sales revenue and gross profit under each of the four methods.
6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory?
7. If Richie's chooses to report inventory using LIFO, record the LIFO adjustment.
Complete this question by entering your answers in the tabs below.
Required 3 Required 4 Required 5 Required 6 Required 7
Calculate ending inventory and cost of goods sold at August 31, using the specific identification method.
Ending inventory
Cost of goods sold
< Required 1
Required 2 >
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