Acc225 Fundamental Accounting Principles: P6-1A Anthony Company uses a perpetual inventory system

Acc225 Fundamental Accounting Principles

P6-1A
Anthony Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
Date Activities Units Acquired at Cost Units Sold at Retail
Mar 1. Beginning inventory 50 units @$50/unit
Mar 5. Purchase 200 units @ $55/unit
Mar 9. Sales 210 units @ $85/unit
Mar 18. purchase 60 units @ $60/unit
Mar 25. purchase 100 units @ $62/unit
Mar 29. sales 80 units @ $95/unit
totals 410 units 290 units Totals 410 units 290 units

Instructions:
1. Compute cost of goods available for sale and 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. weighted average, and d. specific identification. (round per unit costs to three decimals, but inventory balances to the dollar.) for specific identification, the march 9 sale consisted of 40 units from beginning inventory and 170 units from the march 5 purchase, the march 29 sale consisted of 20 units from the march 18 purchase and 60 units from the march 25 purchase.
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?
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