ercise World began January with merchandise inventry of 90 crates of vitamins th
ID: 2393530 • Letter: E
Question
ercise World began January with merchandise inventry of 90 crates of vitamins that cost a total of $5,850. During the month Esercise World purchased and sold merchandise on account as follows Description Date Jan 2 Jan 5 Jan 16 Jan 27 Purchase Sale Quantity 130 crates 576 each 140 crates 5100 eaclh 170 crates @ $86 Sale 180 crates 5104 each Required: Calculate the value of (i) ending inven assumptions, following a periodic inventory approach. tory, (ii) cost of goods sold and, (ili) gross profit using the LIFO and Average cost flow LIFO-GP LIFO-E LIFO-COGS Avg.GP Avg-COGS Avg-EIExplanation / Answer
1.LIFO METHOD INVENTORY SCHEDULE
No
Qty Purchased
Unit Cost
Total Cost
Qty Sold
Unit cost
Total cost
Inv.Qty
Unit Cost
Total cost
Opening balance
90
65
5850
Jan 2
130
76
9880
90
65
5850
130
76
9880
Jan 5
130
76
9880
80
65
5200
10
65
650
Jan 16
170
86
14620
80
65
5200
170
86
14620
Jan 27
170
86
14620
70
65
4550
10
65
650
TOTAL
25800
4550
Cost of goods sold = $ 25800
Ending Inventory = $ 4550
Gross profit= Sales – Cost of goods sold
=(140*100+180*104)-25800
=32720-25800
=6920
2.WEIGHTED AVERAGE INVENTORY SCHEDULE
No
Qty Purchased
Unit Cost
Total Cost
Qty Sold
Unit cost
Total cost
Inv.Qty
Unit Cost
Total cost
Opening balance
90
65
5850
Jan 2
130
76
9880
90
65
5850
130
76
9880
Jan 5
140
71.5*
10010
80
71.5
5720
Jan 16
170
86
14620
80
71.5
5720
170
86
14620
Jan 27
180
81.36**
14644.8
70
81.36
5695.2
TOTAL
24654.8
5695.2
Cost of goods sold = $ 24654.8
Ending Inventory = $ 5695.2
Gross profit= Sales – Cost of goods sold
=(140*100+180*104)-24654.8
=8065.2
???
No
Qty Purchased
Unit Cost
Total Cost
Qty Sold
Unit cost
Total cost
Inv.Qty
Unit Cost
Total cost
Opening balance
90
65
5850
Jan 2
130
76
9880
90
65
5850
130
76
9880
Jan 5
130
76
9880
80
65
5200
10
65
650
Jan 16
170
86
14620
80
65
5200
170
86
14620
Jan 27
170
86
14620
70
65
4550
10
65
650
TOTAL
25800
4550
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