### question during july 2014 micanopy sold 500 units of its productsempire for 8 000 th 4285725

Question

During July 2014, Micanopy, sold 500 units of its productsEmpire for \$8,000. The following units were available.

Units     Cost

BeginningInventory                      200         \$2

Purchase1                                         80          \$4

Purchase2                                         120         \$6

Purchase3                                         300         \$9

Purchase4                                         180         \$12

A sale of 500 units was made after purchase 3. Of the unitssold, 200 came from beginning inventory and 300 came from purchase3.

Determine the costs of goods available for sale and endinginventory in units. Then determine the costs that should beassigned to cost of goods sold and ending inventory under ach ofthe following assumptions. (For each alternative, show the grossmargin. Round unit costs to cents and totals to dollars.)

Costs are assigned under the periodic inventory system using a.)the specific identification method, b) the average-cost method, c.)FIFO method and d.) LIFO method

Costs are assigned under the perpetual inventory system usinga.) the average-cost method, b.) the FIFO method, and c) the LIFOmethod

 E7A. Periodic and PerpetualSystems and Inventory Costing Methods Cost of goods available forsale and ending inventory in units Units Cost Total Beginninginventory 200 \$ 2 \$ 400 Purchase 1 80 4 320 Purchase 2 120 6 720 Purchase 3 300 9 2,700 Purchase 4 180 12 2,160 Cost of goods available forsale 880 \$6,300 Sale in units 500 Ending inventory inunits 380 1. Periodic inventorysystem a. Specific identificationmethod: Sales \$8,000 Cost of goods available forsale Less endinginventory* Cost of goodssold Gross margin \$4,900 * Purchase 1 80 units ? = Purchase 2 120 units ? = Purchase 4 180 units ? = Total endinginventory b. Average-costmethod: Sales \$8,000 Cost of goods available forsale Less endinginventory* Cost of goodssold Gross margin \$4,421 * Average cost = \$6,300 / 880 units = 380 units ? = ** Rounded

 E7A. Periodic and PerpetualSystems and Inventory Costing Methods (Continued) c. FIFO method: Sales \$8,000 Cost of goods available forsale Less endinginventory* Cost of goodssold Gross margin \$5,660 * Purchase 4 180 units ? = Purchase 3 200 units ? = Total endinginventory d. LIFO method: Sales \$8,000 Cost of goods available forsale Less endinginventory* Cost of goodssold Gross margin \$3,020 * BeginningInventory 200 units ? = Purchase 1 80 units ? = Purchase 2 100 units ? = Total endinginventory 2. Perpetual inventorysystem a. Average-costmethod: Sales Cost of goodssold Gross margin \$5,045 Units Cost Amount Beginninginventory 200 Purchase 1 80 Balance 280 * Purchase 2 120 Balance 400 * Purchase 3 300 Balance 700 * Sale (500) *Rounded – Average to becalculated

 E7A. Periodic and PerpetualSystems and Inventory Costing Methods (Concluded) b. FIFO method: Sales Cost of goodssold* Gross margin \$5,660 * Sale 1 From beginninginventory units ? From purchase 1 units ? From purchase 2 units ? From purchase 3 units ? Cost of goodssold 500 units \$2,340 Endinginventory = ? = c. LIFO method: Sales Cost of goodssold* Gross margin \$4,260 * Sale 1 From purchase 3 units ? From purchase 2 units ? From purchase 1 units ? Cost of goodssold 500 units \$3,740 Endinginventory = ? =