Stewart Co.’s beginning inventory and purchases during the year ended December 31, 2008, were as follows:
|
|
|
Unit |
Total |
||
|
|
Units |
Cost |
Cost |
||
|
January 1 |
Inventory |
1,000 |
$50.00 |
$ 50,000 |
|
|
March 10 |
Purchase |
1,200 |
52.50 |
63,000 |
|
|
June 25 |
Sold 800 units |
|
|
|
|
|
August 30 |
Purchase |
800 |
55.00 |
44,000 |
|
|
October 5 |
Sold 1,500 units |
|
|
|
|
|
November 26 |
Purchase |
2,000 |
56.00 |
112,000 |
|
|
December 31 |
Sold 1,000 units |
|
|
|
|
|
Total |
|
5,000 |
|
$269,000 |
|
Instructions
1. Determine the cost of inventory on December 31, 2008, using the perpetual inventory system and each of the following inventory costing methods:
a. first in, first out
b. last in, first out
2. Determine the cost of inventory on December 31, 2008, using the periodic inventory system and each of the following inventory costing methods:
a. first in, first out
b. last in, first out
c. average cost
3. Assume that during the fiscal year ended December 31, 2008, sales were $290,000 and the estimated gross profit rate was 40%. Estimate the ending inventory at December 31, 2008, using the gross profit method.