Reference no: EM132748187
Question - You are provided with the following information for Sheffield Inc. Sheffield Inc. uses the periodic method of accounting for its inventory transactions.
March 1 Beginning inventory 2,000 liters at a cost of 60¢ per liter.
March 3 Purchased 2,500 liters at a cost of 62¢ per liter.
March 5 Sold 2,300 liters for $1.05 per liter.
March 10 Purchased 4,000 liters at a cost of 69¢ per liter.
March 20 Purchased 2,300 liters at a cost of 77¢ per liter.
March 30 Sold 5,200 liters for $1.25 per liter.
Required -
A. Calculate the value of ending inventory that would be reported on the balance sheet, under each of the following cost flow assumptions.
(1) Specific identification method assuming:
(i) The March 5 sale consisted of 1,000 liters from the March 1 beginning inventory and 1,300 liters from the March 3 purchase; and
(ii) The March 30 sale consisted of the following number of units sold from beginning inventory and each purchase: 450 liters from March 1; 550 liters from March 3; 2,900 liters from March 10; 1,300 liters from March 20.
(2) FIFO
(3) LIFO
B. Prepare partial income statements for 2020 through gross profit, under each of the following cost flow assumptions.
(1) Specific identification method assuming:
(i) The March 5 sale consisted of 1,000 liters from the March 1 beginning inventory and 1,300 liters from the March 3 purchase; and
(ii) The March 30 sale consisted of the following number of units sold from beginning inventory and each purchase: 450 liters from March 1; 550 liters from March 3; 2,900 liters from March 10; 1,300 liters from March 20.
(2) FIFO
(3) LIFO.