Acc 205 Week 3 Assignment B

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1. Specific identification method.
Boston Galleries uses the specific identification method for inventory valuation. Inventory information for several oil paintings follows. Painting Cost
1/2 Beginning inventory Woods $21,000
4/19 Purchase Sunset 21,800
6/7 Purchase Earth 31,200
12/16 Purchase Moon 4,000 $78,000 Woods and Moon were sold during the year for a total of $35,000. Determine the firm’s
a. cost of goods sold. Woods $21,000 Moon $4,000 $25,000 b. gross profit. Sales 35,000 CGS 21,000 $4,000 25,000 Gross profit 10,000 c. ending inventory. Beginning inventory + Purchases 78,000 Sales 25,000 Ending inventory 53,000

2. Inventory valuation methods: basic computations.
The January beginning inventory of the Gilette Company consisted of 300 units costing $40 each.
During the first quarter, the company purchased two batches of goods: 700 units at $44 on February 21 and
800 units at $50 on March 28. Sales during the first quarter were 1,400 units at $75 per unit. The
White Company uses a periodic inventory system. Using the White Company data, fill in the following chart to compare the results obtained under FIFO, LIFO and Weighted Average inventory valuation methods.

$$ FIFO $$ LIFO $$ Weighted Average
Goods available for sale 82,800 82,800 82,800
Ending Inventory $20,000 $16,400 $18,400
Cost of Goods Sold $62,800 $66,400 $64,400 Goods available for sale: Beginning Inventory (300 units * $40) $12,000 Purchase February 21 (700 units * $44) 30,800 Purchase March 28 (800 units * $50) 40,000 Total Goods Available $82,800 Ending Inventory and Cost of Goods Sold
FIFO: Ending Inventory Cost of Goods Sold…...

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