Solution-Calculate the cost of ending inventory

Calculate the cost of ending inventory

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Reference no: EM131884391

Question - The following information is taken from the records of West End Distribution Inc. for the month ended May 31.

		Units	Unit Cost
May 1	Purchase #1	100	$1
May 6	Purchase #2	200	1
May 12	Purchase #3	125	2
May 19	Purchase #4	350	2
May 29	Purchase #5	150	3

At May 31, 200 units remain unsold, for specific identification purposes, items on hand at May 31 were:

100 units of Purchase #1

100 units of Purchase #4

The other units were sold on May 31 for $2 each.

Required -

1. Calculate the cost of ending inventory under each of the following costing methods:

a. FIFO

b. Specific identification

c. Weighted average

2. Compute the following calculations:

Sales
Cost of goods sold
Gross profit

3. One of the company's strategies is to minimize income taxes and its accounting policies will reflect this. Which inventory cost method should they adopt and why?

Reference no: EM131884391

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Calculate the cost of ending inventory

Reference no: EM131884391

Reference no: EM131884391

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