ACD Company was formed on December 1, 2018. The following information is availab
ID: 2401919 • Letter: A
Question
ACD Company was formed on December 1, 2018. The following information is available from ACD's inventory record for Product X.
Units Unit Cost
January 1, 2019 (beginning inventory) 1,600 £18.00
Purchases:
January 5, 2019 2,600 £20.00
January 25, 2019 2,400 £21.00
February 16, 2019 1,000 £22.00
March 15, 2019 1,800 £23.00
A physical inventory on March 31, 2019, shows 2,500 units on hand.
Instructions
Prepare schedules assuming the periodic method to compute the 1/cost of goods sold and 2/the ending inventory at March 31, 2019, under each of the following inventory methods:
(a) FIFO.
(b) Weighted-average.
(c) LIFO.
Explanation / Answer
Units
Per unit
Cost
Opening Stock- A
1,600
18
28,800
Purchases-B
05/01/2019
2,600
20
52,000
25/01/2019
2,400
21
50,400
16/02/2019
1,000
22
22,000
15/03/2019
1,800
23
41,400
7,800
1,65,800
Closing Stock- C
2,500
Sales- (A+B-C)
6,900
Particulars
Units
Per unit
Cost
Sales
Per unit
Cost
Opening Stock- A
1,600
18
28,800
1,600
18
28,800
Purchases-B
05/01/2019
2,600
20
52,000
2,600
20
52,000
25/01/2019
2,400
21
50,400
2,400
21
50,400
16/02/2019
1,000
22
22,000
300
22
6,600
15/03/2019
1,800
23
41,400
7,800
1,65,800
5,300
1,09,000
Cost of Goods sold
6,900
1,37,800
Closing Stock- C
16/02/19-(1000-300)
700
22
15,400
1800
1,800
23
41,400
Closing Stock
2,500
56,800
Particulars
Units
Per unit
Cost
Opening Stock- A
1,600
18
28,800
Purchases-B
05/01/2019
2,600
20
52,000
25/01/2019
2,400
21
50,400
16/02/2019
1,000
22
22,000
15/03/2019
1,800
23
41,400
Total Available for sale
(194600/9400)
9,400
20.70
1,94,600
Cost of goods sold
6,900
20.70
1,42,845
Closing Stock
2,500
20.70
51,755
Particulars
Units
Per unit
Cost
Sales
Per unit
Cost
Opening Stock- A
1,600
18
28,800
-
-
Purchases-B
05/01/2019
2,600
20
52,000
1,700
20
34,000
25/01/2019
2,400
21
50,400
2,400
21
50,400
16/02/2019
1,000
22
22,000
1,000
22
22,000
15/03/2019
1,800
23
41,400
1,800
23
41,400
7,800
1,65,800
6,900
1,47,800
Cost of Goods sold
6,900
1,47,800
Closing Stock- C
2,500
Op-1600
1,600
18
28,800
05/01/19-(2600-1700)
900
20
18,000
Closing Stock
2,500
46,800
Units
Per unit
Cost
Opening Stock- A
1,600
18
28,800
Purchases-B
05/01/2019
2,600
20
52,000
25/01/2019
2,400
21
50,400
16/02/2019
1,000
22
22,000
15/03/2019
1,800
23
41,400
7,800
1,65,800
Closing Stock- C
2,500
Sales- (A+B-C)
6,900
- FIFO (In this method, sales is first utilised from opening stock and then 1st purchases onwards)
Particulars
Units
Per unit
Cost
Sales
Per unit
Cost
Opening Stock- A
1,600
18
28,800
1,600
18
28,800
Purchases-B
05/01/2019
2,600
20
52,000
2,600
20
52,000
25/01/2019
2,400
21
50,400
2,400
21
50,400
16/02/2019
1,000
22
22,000
300
22
6,600
15/03/2019
1,800
23
41,400
7,800
1,65,800
5,300
1,09,000
Cost of Goods sold
6,900
1,37,800
Closing Stock- C
16/02/19-(1000-300)
700
22
15,400
1800
1,800
23
41,400
Closing Stock
2,500
56,800
- Weighted Average (on the basis total value)
Particulars
Units
Per unit
Cost
Opening Stock- A
1,600
18
28,800
Purchases-B
05/01/2019
2,600
20
52,000
25/01/2019
2,400
21
50,400
16/02/2019
1,000
22
22,000
15/03/2019
1,800
23
41,400
Total Available for sale
(194600/9400)
9,400
20.70
1,94,600
Cost of goods sold
6,900
20.70
1,42,845
Closing Stock
2,500
20.70
51,755
- LIFO (In this method, sales is first utilised from last purchases onwards)
Particulars
Units
Per unit
Cost
Sales
Per unit
Cost
Opening Stock- A
1,600
18
28,800
-
-
Purchases-B
05/01/2019
2,600
20
52,000
1,700
20
34,000
25/01/2019
2,400
21
50,400
2,400
21
50,400
16/02/2019
1,000
22
22,000
1,000
22
22,000
15/03/2019
1,800
23
41,400
1,800
23
41,400
7,800
1,65,800
6,900
1,47,800
Cost of Goods sold
6,900
1,47,800
Closing Stock- C
2,500
Op-1600
1,600
18
28,800
05/01/19-(2600-1700)
900
20
18,000
Closing Stock
2,500
46,800
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