Calculate cost of goods sold ending inventory and gross

Reference no: EM13569561

Wild Riders Surfboard Company began business on January 1 of the current year. Purchases of surfboards were as follows:

Date	Quantity	Unit Cost	Total Cost
1/3	100	$125	$12,500
4/3	200	$135	$27,000
6/3	100	$145	$14,500
7/3	100	$155	$15,500
Total	500		$69,500

Wild Riders sold 400 boards at $250 per board on the dates listed below. The company uses a perpetual inventory system.

Date	Quantity Sold	Unit Price	Total Sales
3/17	50	$250	$12,500
5/17	75	$250	$18,750
8/10	275	$250	$68,750
Total	400		$100,000

Instructions

a.Calculate cost of goods sold, ending inventory, and gross profit under each of the following inventory valuation methods:

First-in, first-out
Last-in, first-out
Weighted average

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?

Reference no: EM13569561

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