Problem 65A You are provided with the following information

Problem 6-5A You are provided with the following information for Koetteritz Inc. for the month ended June 30, 2017. Koetteritz uses the periodic method for inventory Unit Cost or Selling Price $39 43 67 67 Description Quantity Date June 1 Beginning inventory June 4 Purchase June 10 Sale June 11 Sale return June 18 Purchase June 18 Purchase return June 25 Sale June 28 Purchase 41 137 107 13 57 10 65 30 71 47 Calculate cost per unit. (Round answer to 2 decimal places, e.g. 5.25.) Weighted-average cost per unit Calculate ending inventory, cost of goods sold, gross profit under each of the following methods. (1) LIFO, (2) FIFO. (3) Average-cost. (Round average-cost method answers to 2 decimal places, e.g. 1,250.25 and other answers to 0 decimal places, e.g. 1,250.) LIFO FIFO AVERAGE-COST The ending inventory The cost of goods sold Gross profit Calculate gross profit rate under each of the following methods. (1) LIFO. (2) FIFO. (3) Average-cost. (Round answers to 1 decimal place, e.g. 51.2%) LIFO FIFO AVERAGE-COST Gross profit rate Compare the results for the three cost flow assumptions and answer the following questions.

Solution

STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC FIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ Balance Oct1 41 39 1599 41 39 1599 Purchasse 4-Jun 137 43 5891 118 43 5074 19 43 817 18-Jun 47 44 2068 47 44 2068 28-Jun 30 47 1410 30 47 1410 TOTAL 255 10968 159 6673 96 4295 STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC LIFO METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ Balance Oct1 41 39 1599 41 39 1599 Purchasse 4-Jun 137 43 5891 82 43 3526 55 43 2365 18-Jun 47 44 2068 47 44 2068 28-Jun 30 47 1410 30 47 1410 TOTAL 255 10968 159 7004 96 3964 STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC WEIGHTED AVERAGE METHOD RECIEPTS COST OF GOODS SOLD BALANCE DATE UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ UNITS RATE AMOUNT $ Balance Oct1 41 39 1599 Purchasse 4-Jun 137 43 5891 18-Jun 47 44 2068 28-Jun 30 47 1410 TOTAL 255 43.012 10968 159 43.012 6839 96 43.012 4129 Weighted Average per unit: $ 43.012 Sales:(94*67+65*71): $ 10913 LIFO FIFO Average Ending inventory 3964 4295 4129 Cost of goods sold 7004 6673 6839 Gross profit 3909 4240 4074 Gross Profit rate 35.82% 38.85% 37.33% (Gross profit/ Sales) *100 In the period of rising prices, LIFO gives the highest COGS and the lowest Gross profit. FIFO gives lowest COGS and highest Gross profit.