Penn Company uses a periodic inventory system. At the end of the annual accounti

Question

Penn Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost 1,860 $6 Inventory, December 31, prior year 800 5,140 4,160 For the current year: Purchase, March 21 Purchase, August 1 Inventory, December 31, current Required: Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Round "Average cost per unit" to 2 decimal placos and final answers to nearest whole dollar amount FIFO Average Cost Ending inventory Cost of goods $ 52,280

Explanation / Answer

Calculate ending inventory and cost of goods sold :

Units of goods available for sale = 1860+5140+2990 = 9990 units

Cost of goods available for sale = (1860*6+5140*8+2990*9) = 79190

FIFO LIFO Average cost Ending inventory (2990*9+1170*8) = 36270 (1860*6+2300*8) = 29560 (79190/9990)*4160 = 32976 Cost of goods sold 79190-36270 = 42920 79190-29560 = 49630 79190-32976 = 46214

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