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Specific Identification inventory method computations

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Specific Identification inventory method

Date Activities Units Acquired at Cost Units sold at Retail
Jan. 1 Beg. Inventory 60 units @ $10=$600
Jan. 10 Sales 61 units @ $40
Mar. 14 Purchase 173 units @ $15=$2,595
Mar. 15 Sales 90 units @ $40
July 30 Purchase 260 units @ $20=$5,200
Oct. 5 Sales 140 units @ $40
Oct 26 Purchase 410 units @ $25=$10,250
Totals 903 units $18,645 291 units

Required:

Assume that ending inventory is made up of 70 units from the March 14 purchase, 130 units from the July 30 purchase, and all the units of the October 26 purchase. Using the specific identification method, calculate the cost of goods sold and the gross profit.

Cost of goods sold $__________
Gross Margin $___________

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https://brainmass.com/business/purchases-inventory-and-cogs/specific-identification-inventory-method-computations-334068

Solution Preview

Total purchases:
903 units; total of $18,645 given in the problem

Remaining units in inventory:
903 - 291 unsold = 612 in inventory as given in the problem

Cost of units sold:
January (60 - 0) * $10 = $600
March (173 - 70) * $15 = $1545
July (260 - 130) * $20 = $2600
Oct ...

Solution Summary

The solution shows all the calculations to set up the problem and to arrive at the answers; however, there appear to be two possible errors in the problem as stated. The errors are explained and noted so that the solutions can be easily adjusted with new data.

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See Also This Related BrainMass Solution

Carlson Auto Dealers, Inc: Calculate Inventory Cost

Carlson Auto Dealers Inc. sells a handmade automobile as its only product. Each automobile is identical; however, they can be distinguished by their unique ID number. At the bginning of 2011, Carlson had three cars in inventory, as follows:
Car ID Cost
203 $60,000
207 $60,000
210 $63,000
During 2011, each of the three autos sold for $90,000. Additional purchases (listed in chronological order) and sales for the year as follows:
CAR ID COST SELLING PRICE
211 $63,000 $90,000
212 63,000 93,000
213 64,500 not sold
214 66,000 96,000
215 69,000 100,500
216 70,000 not sold
217 72,000 105,000
218 72,300 106,500
219 75,000 not sold

1. Calculate 2011 ending inventory and cost of goods sold assuming the company uses the specific identification inventory method.
2. Calculate ending inventory and cost of goods sold assuming FIFO and a periodic inventory system.
3. Calculate ending inventory and cost of goods sold assuming LIFO and a periodic inventory system.
4. Calculate ending inventory and cost of goods sold assuming the average cost method and a periodic inventory system.

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