Tiller Company's beginning inventory and purchases during the fiscal year ended December 31, 20-2, were as follows:
Units Unit Price Total Cost January 1, 20-2 Beginning inventory 1,500 $10.00 $15,000
January 12 1st purchase 500 11.50 5,750
February 28 2nd purchase 600 14.50 8,700
June 29 3rd purchase 1,200 15.00 18,000
August 31 4th purchase 800 16.50 13,200
October 29 5th purchase 300 18.00 5,400
November 30 6th purchase 700 18.50 12,950
December 21 7th purchase 400 20.00 8,000 6,000 $87,000
There are 1,200 units of inventory on hand on December 31, 20-2.
REQUIRED
1. Calculate the total amount to be assigned to the cost of goods sold for 20-2 and ending inventory on December 31 under each of the following periodic inventory methods: (a) FIFO (b) LIFO (c) Weighted-average (round calculations to two decimal places)
2. Assume that the market price per unit (cost to replace) of Tiller's inventory on December 31 was $18. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods:
(a) FIFO lower-of-cost-or-market
(b) Weighted-average lower-of-cost-or-market
3. In addition to taking a physical inventory on December 31, Tiller decides to estimate the ending inventory and cost of goods sold. During the fiscal year ended December 31, 20-2, net sales of $100,000 were made at a normal gross profit rate of 35%. Use the gross profit method to estimate the cost of goods sold for the fiscal year ended December 31 and the inventory on December 31.