ACC 205 Week 3 Assignment Inventory
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Description
Inventory. Please complete each of the exercises below in a word document. Save the document, and
submit it in the appropriate week using the Assignment Submission button.
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
Woods and Moon were sold during the year for a total of $35,000. Determine the firm’s
a. cost of goods sold.
b. gross profit.
c. ending inventory.
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 the FIFO, LIFO, and weighted-average inventory methods.
FIFO LIFO Weighted
Average
Goods available for sale $ $ $
Ending inventory, March 31
Cost of goods sold
b. Which of the three methods would be chosen if management’s goal is to:
(1) Produce an up-to-date inventory valuation on the balance sheet?
(2) Show the lowest net income for tax purposes?
3.Perpetual inventory system: journal entries. At the beginning of 20X3, Beehler Company implemented a computerized perpetual inventory system. The first transactions that occurred during 20x3 follow:
1/2/20X3 Purchases on account: 500 units @ $6 = $3,000
1/15/20X3 Sales on account: 300 units...