Question: Greg's Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March 2012:
Required: 1. Calculate ending inventory and cost of goods sold at March 31, 2012, using the specific identification method. The March 5 sale consists of bikes from beginning inventory, the March 17 sale consists of bikes from the March 9 purchase, and the March 27 sale consists of four bikes from beginning inventory and eight bikes from the March 22 purchase.
2. Using FIFO, calculate ending inventory and cost of goods sold at March 31, 2012.
3. Using LIFO, calculate ending inventory and cost of goods sold at March 31, 2012.
4. Using weighted-average cost, calculate ending inventory and cost of goods sold at March 31, 2012.
5. Calculate sales revenue and gross profit under each of the four methods.
6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory? Explain.
7. If Greg's Bicycle Shop chooses to report inventory using LIFO instead of FIFO, record the LIFO adjustment.