## Wednesday, 4 October 2017

### The following information pertains to Mason Company for 2016:

The following information pertains to Mason Company for 2016:

 Beginning inventory 132 units @ \$ 38 Units purchased 390 units @ \$ 57

Ending inventory consisted of 50 units. Mason sold 472 units at \$114 each. All purchases and sales were made with cash. Operating expenses amounted to \$3,675.

Required
 a. Compute the gross margin for Mason Company using the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average.

Explanation:

b. What is the amount of net income using FIFO, LIFO, and weighted average? (Ignore income tax considerations.)

Explanation:
 FIFO LIFO Weighted Avg. Sales \$ 53,808 \$ 53,808 \$ 53,808 Cost of goods Sold (24,396 ) (25,346 ) (24,636 ) Gross margin 29,412 28,462 29,172 Operating expenses 3,675 3,675 3,675 Net income \$ 25,737 \$ 24,787 \$ 25,497

c. Compute the amount of ending inventory using (1) FIFO, (2) LIFO, and (3) weighted average.

Explanation:
 Ending Inventory FIFO 50 @ \$57 \$ 2,850 LIFO 50 @ \$38 1,900 Weighted average 50 @ \$52.195 2,610*

*rounded to the nearest whole dollar.