Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an it
ID: 2432041 • Letter: P
Question
Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 50 units @ $114 Mar. 10 Purchase 50 units @ $122 Aug. 30 Purchase 30 units @ $128 Dec. 12 Purchase 70 units @ $130 There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.
Explanation / Answer
LIFO
1) COGS: $14,360
Working:
50 units
@114
5700
50 units
@122
6100
20 units
@128
2560
120 units
14360
Jan. 1
Inventory 50 units @ $114
Mar. 10
Purchase 50 units @ $122
Aug. 30
Purchase 30 units @ $128
Dec. 12
Purchase 70 units @ $130
80 units of the item in the physical inventory at December 31
Sales = (50+50+30+70) - 80 = 120 units
2) Ending inventory: $9,360
50 units
@114
5700
30 units
@122
3660
80 units
9360
?
FIFO:
1) COGS: $14,360
Working:
50 units
@114
5700
50 units
@122
6100
20 units
@128
2560
COGS
14360
2) Ending inventory: $10,380
Working:
70 units
@130
9100
10 units
@128
1280
10380
?
Weighted average:
1) COGS: $14,844
Working:
50 units
@114
5700
50 units
@122
6100
30 units
@128
3840
70 units
@130
9100
200 units
24740
120 units: 24740 / 200 * 120 = 14,844
2) Ending inventory: $9,896
Working: 24,740 / 200 * 80 = 9,896
50 units
@114
5700
50 units
@122
6100
20 units
@128
2560
120 units
14360
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