Chapter 6: Q16RQ (page 357)
When using the periodic inventory system and weighted-average inventory costing method, when is the weighted-average cost per unit computed?
The periodic inventory system computes the weighted average cost only once at the end of the period.
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Right Now Electronic Center began October with 100 units of merchandise inventory that cost \(70 each. During October, the store made the following purchases:
Oct. 3 35 units @ \) 82 each
12 45 units @ \( 84 each
18 75 units @ \) 90 each
Right Now uses the periodic inventory system, and the physical count at October 31indicates that 130 units of merchandise inventory are on hand.
Requirements
3. Which method will result in the lowest income taxes for Right Now? Why? Whichmethod will result in the highest net income for Right Now? Why?
Assume that AB Tire Store completed the following perpetual inventory transactions for a line of tires:
May 1 Beginning merchandise inventory 16 tires @ \( 65 each
11 Purchase 10 tires @ \) 78 each
23 Sale 12 tires @ \( 88 each
26 Purchase 14 tires @ \) 80 each
29 Sale 18 tires @ $ 88 each
Requirements
3. Compute cost of goods sold and gross profit using the weighted-average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.)
Question:Golf Unlimited carries an inventory of putters and other golf clubs. The sales price of each putter is \(119. Company records indicate the following for a particular line ofGolf Unlimited’s putters:
Date Item Quantity Unit Cost
Nov. 1 Balance 24 \) 53
6 Sale 20
8 Purchase 30 70
17 Sale 30
30 Sale 2
Requirements
1. Prepare Golf Unlimited’s perpetual inventory record for the putters assuming GolfUnlimited uses the weighted-average inventory costing method. Round weightedaveragecost per unit to the nearest cent and all other amounts to the nearest dollar.Then identify the cost of ending inventory and cost of goods sold for the month.
Question:Refer to Short Exercises S6-4 through S6-6. After completing those exercises, answer the following questions:
Requirements
3. If costs had been declining instead of rising, which inventory costing methodwould have produced the highest cost of goods sold?
Nutriset Foods reports merchandise inventory at the lower-of-cost-or-market. Prior to releasing its financial statements for the year ended March 31, 2019, Nutriset’s preliminary income statement, before the year-end adjustments, appears as follows:
NUTRISET FOODS
Income Statement (Partial)
Year Ended March 31, 2019
Net Sales Revenue \( 118,000
Cost of Goods Sold 47,000
Gross Profit \) 71,000
Nutriset has determined that the current replacement cost of ending merchandise inventory is \(19,500. Cost is \)24,000.
Requirements
1. Journalize the adjusting entry for merchandise inventory, if any is required.
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