Grayson Company Sells Many Products

question 125

Essay

Grayson Company sells many products. Gizmo is one of its popular items. Below is an analysis of the inventory purchases and sales of Gizmo for the month of March. Grayson Company uses the perpetual inventory system. Instructions
(a) Using the FIFO assumption, calculate the amount charged to cost of goods sold for March. (Show computations)
(b) Using the FIFO assumption, calculate the value of ending inventory for March.
(c) Using the moving average cost method, calculate the amount assigned to the inventory on hand on March 31. (Show computations)
(d) Using the LIFO assumption, calculate the amount assigned to the inventory on hand on March 31. (Show computations)
(e) Using the LIFO assumption, calculate the amount charged to cost of goods sold for March. (Show computations)

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Definitions:

Preemptive Rights

Rights given to existing shareholders to purchase additional shares in a company before new shares are offered to the public, in order to maintain their percentage of ownership.

Charter

A legal document giving a corporation or other organization its rights and privileges, or a charter can also refer to the authorization for a municipal corporation to operate.

Compensation

involves payment or remuneration provided to an individual or entity for loss, injury, or suffering, aiming to restore financial or emotional equilibrium.

Blue Sky Laws

State laws in the United States designed to protect investors from fraud by requiring sellers of new issues of securities to register their offerings and provide financial details.