Gladstone Company tracks the number of units purchased and sold throughout each

Question

Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.

  

Assume that for the specific identification method (item 1d below) the March 14 sale was 580 units from beginning inventory and 870 units from the January 30 purchase, and that the sale on August 31 was 1220 units from the beginning inventory and 680 units from the May 1 purchase.

Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods:

Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.

Explanation / Answer

1) Last in first out :-

Ending inventory :-

2) Weighted Average Cost :-

Weighted Average price per unit :-

= Total amount available for sale / Total units available for sale

= $341000 / 5500 units

= $6.2

3) First in first out :-

Ending inventory :-

Particulars Calculation Amount($) Beginning Inventory 1800 * $50 90000 Add : Purchases 2500 * $62 155000 1200 * $80 96000 Goods Available for Sale 341000 Less : Ending Inventory (1800*$50) + (350*$62) (111700) Cost of Goods Sole (1450*$62)+(1200*$80)+(700*$62) 229300

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