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AC1420: Week 3 Inventory Accounting




Question;Every month;a local auto parts store purchases stainless steel cylinder head gaskets directly;from the manufacturer. The price that the local auto parts store pays is;adjusted monthly due to the high volatility of steel prices.;Beginning;inventory January 1st: 500 units at a price of $20;Purchases in;January: 100 units at a price of $22;Purchases in;February: 225 units at a price of $24.50;Purchases in;March: 200 units at a price of $21;At the end of each quarter, the store performs;a physical inventory count.;When the;current physical inventory count was performed on March 31st, 327 stainless steel;cylinder head gaskets were counted.;Task 1;Calculate the ending inventory value using the First-in, first-out (FIFO) and;Last-in;first-out (LIFO) methods assuming a periodic record keeping method.;Task 2;Calculate Sales, Cost of Goods Sold, and Gross Margin for each inventory valuation;method assuming that the sale price from the local auto parts store to the end customer;is $43 per gasket.;Make sure;you explain how you arrive at your solution.;Submission;Requirements;Submit your;answers in a Microsoft (MS) Word file.;Font: Arial;12 point, double-spaced


Paper#39569 | Written in 18-Jul-2015

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