## Friday, 11 October 2013

### Anthony Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Beginning inventory 60 units @ \$50.20/unit Mar. 5 Purchase 205 units @ \$55.20/unit Mar. 9 Sales 220 units @ \$85.20/unit Mar. 18 Purchase 65 units @ \$60.20/unit Mar. 25 Purchase 110 units @ \$62.20/unit Mar. 29 Sales 90 units @ \$95.20/unit Totals 440 units 310 units

Anthony Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.

 Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Beginning inventory 60 units @ \$50.20/unit Mar. 5 Purchase 205 units @ \$55.20/unit Mar. 9 Sales 220 units @ \$85.20/unit Mar. 18 Purchase 65 units @ \$60.20/unit Mar. 25 Purchase 110 units @ \$62.20/unit Mar. 29 Sales 90 units @ \$95.20/unit Totals 440 units 310 units

Required:

Compute cost of goods available for sale and the number of units available for sale.

Explanation:
 Beginning inventory 60 units @ \$50.20 \$ 3,012 March  5 205 units @ \$55.20 11,316 March 18 65 units @ \$60.20 3,913 March 25 110 units @ \$62.20 6,842 Units available 440 units Cost of goods available for sale \$ 25,083

2. Compute the number of units in ending inventory.

Explanation:
 Units available (from part 1) 440 units Less: Units sold (220 + 90) 310 units Ending Inventory (units) 130 units

 Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 45 units from beginning inventory and 175 units from the March 5 purchase; the March 29 sale consisted of 25 units from the March 18 purchase and 65 units from the March 25 purchase. (Round your per unit costs to 2 decimal places)

Explanation:
 (a) FIFO perpetual
 Date Goods Purchased Cost of Goods Sold Inventory Balance Mar. 1 60 @ \$50.20 = \$ 3,012 Mar. 5 205 @ \$55.20 = \$ 11,316 60 @ \$50.20 205 @ \$55.20 = \$ 14,328 Mar. 9 60 @ \$50.20 = \$ 3,012 45 @ \$55.20 = \$ 2,484 160 @ \$55.20 = \$ 8,832 Mar. 18 65 @ \$60.20 = \$ 3,913 45 @ \$55.20 65 @ \$60.20 = \$ 3,913 Mar. 25 110 @ \$62.20 = \$ 6,842 45 @ \$55.20 65 @ \$60.20 110 @ \$62.20 = \$ 13,239 Mar. 29 45 @ \$55.20 = \$ 2,484 20 @ \$60.20 45 @ \$60.20 = \$ 2,709 110 @ \$62.20 = \$ 8,046 \$ 17,037

 (b) LIFO perpetual
 Date Goods Purchased Cost of Goods Sold Inventory Balance Mar. 1 60 @ \$50.20 = \$ 3,012 Mar. 5 205 @ \$55.20 = \$ 11,316 60 @ \$50.20 205 @ \$50.20 = \$ 14,328 Mar. 9 205 @ \$55.20 = \$ 11,316 45 @ \$50.20 = \$ 2,259 15 @ \$50.20 = \$ 753 Mar. 18 65 @ \$60.20 = \$ 3,913 45 @ \$50.20 65 @ \$60.20 = \$ 6,172 Mar. 25 110 @ \$62.20 = \$ 6,842 45 @ \$50.20 65 @ \$60.20 110 @ \$62.20 = \$ 13,014 45 @ \$50.20 Mar. 29 90 @ \$62.20 = \$ 5,598 65 @ \$60.20 20 @ \$62.20 = \$ 7,416 \$ 17,667

 (c) Weighted Average perpetual
 Date Goods Purchased Cost of Goods Sold Inventory Balance Mar. 1 60 @ \$50.20 = \$ 3,012 Mar. 5 205 @ \$55.20 = \$ 11,316 60 @ \$50.20 205 @ \$55.20 = \$ 14,328 (avg. = \$54.07) Mar. 9 220 @ \$54.07 = \$ 11,895 45 @ \$54.07 = \$ 2,433 (avg. = \$54.07) Mar. 18 65 @ \$60.20 = \$ 3,913 45 @ \$54.07 65 @ \$60.20 = \$ 6,346 (avg. = \$57.69) Mar. 25 110 @ \$62.20 = \$ 6,842 45 @ \$54.07 65 @ \$60.20 110 @ \$62.20 = \$ 13,188 (avg. = \$59.94) Mar. 29 90 @ \$59.94 = \$ 5,395 130 @ \$59.94 = \$ 7,793 \$ 17,290

 (d) Specific Identification
 Date Goods Purchased Cost of Goods Sold Inventory Balance Mar. 1 60 @ \$50.20 = \$ 3,012 Mar. 5 205 @ \$55.20 = \$ 11,316 60 @ \$50.20 205 @ \$55.20 = \$ 14,328 Mar. 9 45 @ \$50.20 = \$ 2,259 15 @ \$50.20 175 @ \$55.20 = \$ 9,660 30 @ \$55.20 = \$ 2,409 Mar. 18 65 @ \$60.20 = \$ 3,913 15 @ \$50.20 30 @ \$55.20 65 @ \$60.20 = \$ 6,322 Mar. 25 110 @ \$62.20 = \$ 6,842 15 @ \$50.20 30 @ \$55.20 65 @ \$60.20 110 @ \$62.20 = \$ 13,164 Mar. 29 25 @ \$60.20 = \$ 1,505 15 @ \$50.20 65 @ \$62.20 = \$ 4,043 30 @ \$55.20 40 @ \$60.20 \$ 17,467 45 @ \$62.20 = \$ 7,616

Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 45 units from beginning inventory and 175 units from the March 5 purchase; the March 29 sale consisted of 25 units from the March 18 purchase and 65 units from the March 25 purchase. (Round your per unit costs to 2 decimal places and inventory balances.)