Parker Company uses a perpetual inventory system?
Parker Company uses a perpetual inventory system?
Parker Company uses a perpetual inventory system. It entered into the following calendar-year 2005? Purchases and sales transactions: Alternative cost flows—perpetual Jan. 1 Beginning inventory . . . . . . . 600 units @ $44/unit Feb. 10 Purchase . . . . . . . . . . . . . . . 200 units @ $40/unit Mar. 13 Purchase . . . . . . . . . . . . . . . 100 units @ $20/unit Mar. 15 Sales . . . . . . . . . . . . . . . . . . 400 units @ $75/unit Aug. 21 Purchase . . . . . . . . . . . . . . . 160 units @ $60/unit Sept. 5 Purchase . . . . . . . . . . . . . . . 280 units @ $48/unit Sept. 10 Sales . . . . . . . . . . . . . . . . . . 200 units @ $75/unit Totals . . . . . . . . . . . . . . . . . 1,340 units 600 units 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) specific identification (Note: The units sold consist of 500 units from beginning inventory and 100 units from the March 13 purchase), and (d) weighted average. 4. Compute the gross profit earned by the company for each of the four costing methods in part 3. Analysis Component 5. If the company’s manager earns a bonus based on a percent of gross profit, which method of inventory costing will the manager likely prefer? Check (3) Ending inventory: FIFO, $33,040; LIFO, $35,440;WA, $34,055; (4) LIFO gross profit, $21,000
I need to know the answers to the 4 questions. I am not for sure how to compute the FIFO. LIFO, specific indentification and weighted average.
Comments
FIFO is "first in, first out" that means (for example) that the in the sales, the first 600 sold have a cost of $44 per unit.
LIFO is last in first out. So, the sale in march starts with 100 units @ 20, 200 @40 and 100 @ 44
You can see that the gross profit is different.
From there, you should be able to do the calculations yourself.
CEOs are grossly overpaid. They should reduce their salary according to the losses and/or increase it as they improve earnings.