Snoslope sells a snowboard, Xpert, that is popular with snowboard enthusiasts. B

Question

Snoslope sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Below is information relating to Snoslope's purchases of Xpert snowboards during September. During the same month, 118 Xpert snowboards were sold. Snoslope uses a periodic inventory system. Date Explanation Units Unit Cost Total Cost Sept. 1 Inventory 14 $98 $1,372 Sept. 12 Purchases 45 102 4,590 Sept. 19 Purchases 20 104 2,080 Sept. 26 Purchases 50 105 5,250 Totals 129 $13,292 (a) Compute the ending inventory at September 30 using the FIFO and LIFO methods. FIFO Ending Inventory $ LIFO Ending Inventory $ (b) For both FIFO and LIFO, calculate the sum of ending inventory and cost of goods sold. FIFO COGS $ LIFO COGS $

Explanation / Answer

Total inventory available for sale = $13,320 Number of units remaining in ending inventory = 129 - 118 = 11 units FIFO The last units purchased remain in ending inventory Ending Inventory = 11 x $105 = $1,155 Cost of Goods Sold = 13,320 - 1,155 = $12,165 LIFO The first units purchased remain in ending inventory Ending Inventory = 11 x 100 = $1,100 Cost of Goods Sold = 13,320 - 1,100 = 12,220 Average Cost Average cost per unit = 13,320 / 129 = 103.26 Ending Inventory = 11 x 103.26 = 1,135.86 Cost of Goods Sold = 13,320 - 1,135.86 = 12,184.14 Without knowing the selling price, gross profit and gross profit percentage cannot be calculated. But here are the formulas to use. Sales = 118 x unit selling price Gross Profit = Sales - Cost of Goods Sold Gross Profit Rate = Gross Profit / Sales

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