Reference no: EM132280349
Question - Papier Mache Corp. uses the periodic inventory system, and implements LIFO. On March 1, it had a beginning inventory of 700 reams of paper at a cost of $10 per ream.
During the month, it made the following purchases of paper:
- March 3: 800 reams at $12 per ream
- March 12: 600 reams at $13 per ream
- March 16: 1,500 reams at $15 per ream
During the month, all of its sales were made to the Stan Still Stationery Store (which was fully paid for), as follows:
- March 4: 950 reams at $28 per ream
- March 14: 300 reams at $31 per ream
- March 19: 1,425 reams at $25 per ream
1. For the month of March, what is Papier Mache Corp.'s dollar value of cost of goods sold and ending inventory it would report on its financial statements? Round your answers to the nearest dollar.
2. On April 1, the Stan Still Stationery Store (not Papier Mache Corp.) sells 625 reams of paper at $42 per ream to its customer. Assuming it has no other inventory other than the paper purchased from Papier Mache Corp., and it uses the average cost method, what is its cost of goods sold and gross profit it would report for this sale? Round the average cost per ream to the nearest cent.