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Question(s) / Instruction(s):

Ammons Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for January.

Date        Activities          Units Acquired at Cost       Units Sold at Retail

.

.

.

Requirement 1:

Compute cost of goods available for sale and the number of units available for sale.

Requirement 2:

Compute the number of units in ending inventory.

Requirement 3:

Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the January 9 sale consisted of 5 units from beginning inventory and 13 units from the January 5 purchase; the January 29 sale consisted of 1 unit from the January 18 purchase and 7 units from the January 25 purchase.

Requirement 4:

Compute gross profit earned by the company for each of the four costing methods in Requirement 3.

Problem 6-1A


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