Problem 6-2A

Problem 6-2A


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Marlow Company uses a perpetual inventory system. it entered into the following calendar year 2011 purchases and sales transactions.


Jan 1. Beginning inventory 600 units @ $44/unit

Feb 10. purchase              200 units @ $40 unit

Mar 13. purchase              100 units @ $20 unit

Mar 15. Sales                                                   400 units @ $75 unit

Aug 21 purchase               160 units @ $60 unit

Sept 5. purchase               280 units @ $ 48 unit

Sept 10. sales                                                      200 units @ $ 75 unit

Totals                               1,340 units                        600 units


1. compute cost of goods available for sale and the number of units available for sale

2. compute the number of units in ending inventory

3. compute the cost assigned to ending inventory using a. FIFO, b. LIFO, C. specific indentification- units sold consist of 500 units from beginning inventory and 100 units from the march 13 purchase, and d. weighted aveage. round per unit costs to three decimals, but inventory balances to the dollar.

4. compute gross profit earned by the company for each of the four costing methods in part 3.