Aircard Corporation tracks the number of units purchased and sold throughout eac

Question

Aircard Corporation 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.

The following are the transactions for the month of July.

Units Unit Cost July 1 Beginning Inventory 2,000 *$ 35

July 5 Sold 1,000

July 13 Purchased 6,000*39

July 17 Sold 3,000

July 25 Purchased 8,000 *41

July 27 Sold 5,000

Calculate the cost of goods available for sale, ending inventory, and cost of goods sold if Aircard uses (a) FIFO, (b) LIFO, or (c) weighted average cost. (Round "Cost per Unit" to 2 decimal places.)

Explanation / Answer

Units Unit cost Total 1-Jul 2000 35 70000 13-Jul 6000 39 234000 25-Jul 8000 41 328000 Total 16000 632000 Ending inventory units = 16000-1000-3000-5000= 7000 a FIFO: Cost of goods available for sale 632000 Ending inventory 287000 =7000*41 Cost of goods sold 345000 =632000-287000 b LIFO: Cost of goods available for sale 632000 Ending inventory 265000 =(2000*35)+(5000*39) Cost of goods sold 367000 =632000-265000 c Average cost = 632000/16000= $39.5 Cost of goods available for sale 632000 Ending inventory 276500 =7000*39.5 Cost of goods sold 355500 =632000-276500

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