Aloha Company uses a perpetual inventory system. It entered into the following calendar-year 2015...
Question:
Aloha Company uses a perpetual inventory system. It entered into the following calendar-year 2015 purchases and sales transactions. (For specific identification, the May 9 sale consisted of 80 units from beginning inventory and 100 units from the May 6 purchase; the May 30 sale consisted of 200 units from the May 6 purchase and 100 units from the May 25 purchase.)
| Date | Activities | Units Acquired at Cost | Units Sold at Retail | ||
|---|---|---|---|---|---|
| May 1 | Beginning inventory | 150 units | @ $300.00 per unit | ||
| May 6 | Purchase | 350 units | @ $350.00 per unit | ||
| May 9 | Sales | 180 units | @ $1,200.00 per unit | ||
| May 17 | Purchase | 80 units | @ $450.00 per unit | ||
| May 25 | Purchase | 100 units | @ $458.00 per unit | ||
| May 30 | Sales | 300 units | @ $1,400.00 per unit | ||
| Total | _______ 680 units |
_______ 480 units |
Required
1. Compute cost of goods available for sale and the number of units available for sale
2. Compute the number of units in ending inventory.
3. Compute the cost assigned to ending inventory using (a) FIFO. (b) LIFO. (c) weighted average, and (d) specific identification. (Round all amounts to cents.)
4. Compute gross profit earned by the company for each of the four costing methods in part 3.
Perpetual Inventory System
Perpetual Inventory system which is considered to be a better system than the periodic system because it is based for regular track over the inventory where we give a regular track how much inventory is entered in the business and how much quantity has left or sold out. There are various method like FIFO,LIFO,Weighted Average Method,Simple Average Method etc to compute Cost of Cost Sold and Closing Inventory. Each of them have their own merits and disadvantage, depending on the organizations they are being used.
Answer and Explanation: 1
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1.
Calculate the cost of goods for sale and the number of units available for sale as shown below:
Goods available for sale
| Details | Units | Cost per... |
|---|
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Chapter 1 / Lesson 15Perpetual inventory systems are used by businesses to monitor their inventories in real-time with the use of radio frequency identification, barcodes, point of sales, and other technological systems. Learn about the definition of a perpetual inventory system, the advantages of using this system, and some examples of perpetual inventory systems.