Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transacti been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Cost of Goods Sold Inventory on Hand More info Unit Cost Date Quantity Dec. 1 11 23 26 29 Purchases Unit Cost Total Cost Unit Quantity Cost Total Cost Quantity Total Cost Dec. 1 Beginning merchandise inventory Dec. 11 Purchase Dec. 23 Sale Dec. 26 Purchase Dec. 29 Sale Requirements 1. 22 tires @ $53 each 14 tires @ $71 each 18 tires @ $82 each 10 tires @ $74 each 19 tires @ $82 each Compute cost of goods sold and gross profit using the FIFO inventory corting method X - X

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Assume that Whitewall Tire Store completed the following perpetual inventory transactions for a line of tires:
i (Click the icon to view the transactions.)
Read the requirements.
Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method.
Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have
been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.)
Date Quantity
Dec. 1
11
23
261
29
Totals
Purchases
Unit
Cost
Cost of Goods Sold
Total
Unit
Cost Quantity Cost
Total
Cost
Inventory on Hand
Unit
Quantity Cost
C
Total
Cost
More info
Dec. 1 Beginning merchandise inventory
Dec. 11 Purchase
Dec. 23 Sale
Dec. 26 Purchase
Dec. 29 Sale
Requirements
1.
2.
3.
4.
22 tires @ $53 each
14 tires @ $71 each
18 tires @ $82 each
10 tires @ $74 each
19 tires @ $82 each
Compute cost of goods sold and gross profit using the FIFO inventory
costing method.
Compute cost of goods sold and gross profit using the LIFO inventory
costing method.
- X
Compute cost of goods sold and gross profit using the weighted-average
inventory costing method. (Round weighted-average cost per unit to the
nearest cent and all other amounts to the nearest dollar.)
Which method results in the largest gross profit, and why?
-
X
Transcribed Image Text:Assume that Whitewall Tire Store completed the following perpetual inventory transactions for a line of tires: i (Click the icon to view the transactions.) Read the requirements. Requirement 1. Compute cost of goods sold and gross profit using the FIFO inventory costing method. Begin by computing the cost of goods sold and cost of ending merchandise inventory using the FIFO inventory costing method. Enter the transactions in chronological order, calculating new inventory on hand balances after each transaction. Once all of the transactions have been entered into the perpetual record, calculate the quantity and total cost of merchandise inventory purchased, sold, and on hand at the end of the period. (Enter the oldest inventory layers first.) Date Quantity Dec. 1 11 23 261 29 Totals Purchases Unit Cost Cost of Goods Sold Total Unit Cost Quantity Cost Total Cost Inventory on Hand Unit Quantity Cost C Total Cost More info Dec. 1 Beginning merchandise inventory Dec. 11 Purchase Dec. 23 Sale Dec. 26 Purchase Dec. 29 Sale Requirements 1. 2. 3. 4. 22 tires @ $53 each 14 tires @ $71 each 18 tires @ $82 each 10 tires @ $74 each 19 tires @ $82 each Compute cost of goods sold and gross profit using the FIFO inventory costing method. Compute cost of goods sold and gross profit using the LIFO inventory costing method. - X Compute cost of goods sold and gross profit using the weighted-average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.) Which method results in the largest gross profit, and why? - X
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