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Three identical units of merchandise were purchased during March, as follows:





Steele Plate
Units
Cost


Mar. 3
Purchase
1

$830


10
Purchase
1
840


19
Purchase
1
880



Total
3

$2,550




Assume that one unit is sold on March 23 for 
$1,125. Determine the gross profit for March and ending inventory on March 31 using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods.





Gross Profit
Ending Inventory


a. First-in, first-out (FIFO)

$◻



b. Last-in, first-out (LIFO)

$◻



c. Weighted average cost

$◻

Three identical units of merchandise were purchased during March, as follows:\newline\begin{tabular}{rlcr} \newline& Steele Plate & Units & Cost \\\newline\hline Mar. 33 & Purchase & 11 & $830 \$ 830 \\\newline1010 & Purchase & 11 & 840840 \\\newline1919 & Purchase & 11 & 880880 \\\newline\cline { 22 - 33 } & Total & 33 & $2,550 \$ 2,550 \\\newline\hline\newline\end{tabular}\newlineAssume that one unit is sold on March 2323 for $1,125 \$ 1,125 . Determine the gross profit for March and ending inventory on March 3131 using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods.\newline\begin{tabular}{lll} \newline& Gross Profit & Ending Inventory \\\newline\hline a. First-in, first-out (FIFO) & $ \$ \square \\\newlineb. Last-in, first-out (LIFO) & $ \$ \square \\\newlinec. Weighted average cost & $ \$ \square \newline\end{tabular}

Full solution

Q. Three identical units of merchandise were purchased during March, as follows:\newline\begin{tabular}{rlcr} \newline& Steele Plate & Units & Cost \\\newline\hline Mar. 33 & Purchase & 11 & $830 \$ 830 \\\newline1010 & Purchase & 11 & 840840 \\\newline1919 & Purchase & 11 & 880880 \\\newline\cline { 22 - 33 } & Total & 33 & $2,550 \$ 2,550 \\\newline\hline\newline\end{tabular}\newlineAssume that one unit is sold on March 2323 for $1,125 \$ 1,125 . Determine the gross profit for March and ending inventory on March 3131 using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods.\newline\begin{tabular}{lll} \newline& Gross Profit & Ending Inventory \\\newline\hline a. First-in, first-out (FIFO) & $ \$ \square \\\newlineb. Last-in, first-out (LIFO) & $ \$ \square \\\newlinec. Weighted average cost & $ \$ \square \newline\end{tabular}
  1. Calculate gross profit FIFO: Calculate gross profit using FIFO (First-in, First-out). The first unit bought for $830\$830 is sold for $1,125\$1,125. Gross Profit = Selling Price - Cost Price Gross Profit = $1,125$830\$1,125 - \$830 Gross Profit = $295\$295
  2. Calculate ending inventory FIFO: Calculate ending inventory using FIFO. The last two units remain, one bought for $840\$840 and one for $880\$880. Ending Inventory = $840+$880\$840 + \$880 Ending Inventory = $1,720\$1,720
  3. Calculate gross profit LIFO: Calculate gross profit using LIFO (Last-in, First-out).\newlineThe last unit bought for $880\$880 is sold for $1,125\$1,125.\newlineGross Profit = Selling Price - Cost Price\newlineGross Profit = $1,125$880\$1,125 - \$880\newlineGross Profit = $245\$245
  4. Calculate ending inventory LIFO: Calculate ending inventory using LIFO.\newlineThe first two units remain, one bought for $830\$830 and one for $840\$840.\newlineEnding Inventory = $830+$840\$830 + \$840\newlineEnding Inventory = $1,670\$1,670
  5. Calculate weighted average cost: Calculate the weighted average cost per unit.\newlineTotal Cost = $830\$830 + $840\$840 + $880\$880\newlineTotal Cost = $2,550\$2,550\newlineTotal Units = 33\newlineWeighted Average Cost = Total Cost / Total Units\newlineWeighted Average Cost = $2,550\$2,550 / 33\newlineWeighted Average Cost = $850\$850
  6. Calculate gross profit weighted average: Calculate gross profit using weighted average cost.\newlineGross Profit = Selling Price - Weighted Average Cost\newlineGross Profit = $1,125\$1,125 - $850\$850\newlineGross Profit = $275\$275
  7. Calculate ending inventory weighted average: Calculate ending inventory using weighted average cost.\newlineTwo units remain, each at the weighted average cost of $850\$850.\newlineEnding Inventory = 2×$8502 \times \$850\newlineEnding Inventory = $1,700\$1,700

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