Question 1 - Golfer's Delight, Inc., carries a line of titanium putters. Golfer's Delight, Inc., uses the FIFO method and a perpetual inventory system. The sales price of each putter is $195. Company records indicated the following activity for putters for the month of July:
|
Date
|
Item
|
Quantity
|
Unit Cost
|
|
Jul 1
|
Balance
|
6
|
$110
|
|
7
|
Purchase
|
12
|
$112
|
|
11
|
Sale
|
17
|
|
|
19
|
Purchase
|
15
|
$114
|
|
28
|
Sale
|
12
|
|
Requirements -
1. Prepare a perpetual inventory record for the putters to determine the amount Golfer's Delight, Inc., should report for ending inventory and cost of goods sold using the FIFO method.
2. Journalize the inventory transactions for Golfer's, Inc., using the FIFO method. Assume all purchases and sales are on account.
Question 2 - Refer to the data for question 1. However, instead of the FIFO method, assume Golfer's Delight, Inc., uses the LIFO method.
Requirements -
1. Prepare a perpetual inventory record for the putters on the LIFO basis to determine the cost of ending inventory and cost of goods sold for the month.
2. Journalize the inventory transactions for Golfer's Delight, Inc., using the perpetual LIFO method. Assume all purchases and sales are on account.
Question 3 - Refer to the data for question 1. However, instead of the FIFO method, assume Golfer's Delight, inc., uses the average cost method.
Requirements -
1. Prepare a perpetual inventory record for the putters on the averages cost basis to determine the cost of ending inventories and cost of goods sold for the month. Round average cost per unit to the nearest cent and all other amounts to the nearest dollar.
2. Journalize the inventory transactions for Golfer's Delight, Inc., using the perpetual average cost method. Assume all purchases and sales are on account.
Question 4 - Assume Bello's Bikes, Inc., bought and sold a line of mountain bikes during October as follows:
|
Date
|
Item
|
Quantity
|
Unit Cost
|
|
Oct 1
|
Balance
|
13
|
$270
|
|
5
|
Sale
|
11
|
|
|
12
|
Purchase
|
18
|
$273
|
|
21
|
Sale
|
8
|
|
|
30
|
Sale
|
7
|
|
Bello's Bikes, Inc., uses the perpetual inventory system.
Requirements -
1. Compute the cost of ending inventory under FIFO.
2. Compute the cost of ending inventory under LIFO.
3. Which method results in higher cost of ending inventory?
Question 5 - Refer to the data for Bello's Bikes, Inc., in question 4.
Requirements -
1. Compute the cost of goods sold under FIFO.
2. Compute the cost of goods sold under LIFO.
3. Which method results in the higher cost of goods sold?