Background Information: Transactions Units Unit Cost Beginning inventory, Januar
ID: 2434967 • Letter: B
Question
Background Information:Transactions Units Unit Cost
Beginning inventory, January 1, 2009 1,800 $5.00
Transactions during 2009:
a. Purchase, January 30 2,500 6.20
b. Sale, March 14 ($10 each) (1,450 )
c. Purchase, May 1 1,200 8.00
d. Sale, August 31 ($10 each) (1,900 )
Problem:
Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31, 2009, under each of the following inventory costing methods. For Specific Identification, assume that the March 14, 2009, sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30, 2009. And that the sale of August 31, 2009, was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1, 2009. (Do not round Weighted average cost per unit. Round your final answers to the nearest dollar amount.)
Goods available for sale Ending inventory Cost of goods sold
a. Last-in, first-out. $34,100 $11,170 $22,930
b. Weighted average cost. $34,100 $13,330 $20,770
c. First-in, first-out. $34,100 $15,490 $18,610
d. Specific identification. $34,100 ? ?
Definition:
Specific Identification - The inventory costing method that identifies the cost of the specific item that was sold. I just need help with the specific identification part, I did all the other parts and got them right but I am confused with the wording on the specific information part. If any one could explain it to me and show me how to do this problem then I will award them lifesaver points/karma
Specific Identification - The inventory costing method that identifies the cost of the specific item that was sold. I just need help with the specific identification part, I did all the other parts and got them right but I am confused with the wording on the specific information part. If any one could explain it to me and show me how to do this problem then I will award them lifesaver points/karma
Explanation / Answer
Transactions Units Unit Cost Beginning inventory, January 1, 2009 1,800 $5.00 Transactions during 2009: a. Purchase, January 30 2,500 6.20 ----------------------------------------------------------------------------------------------------------------------------------- b. Sale, March 14 (From Beginning Inventory) (580) ($5 each) Sale, March 14 (From Purchase Jan.30) (870) ($6.20each) ----------------------------------------------------------------------------------------------------------------------------------- Ending Inventory on March 14 Beginning inventory, January 1, 2009 1,220 $5.00 Transactions during 2009: a. Purchase, January 30 1,630 6.20 c. Purchase, May 1 1,200 8.00 ----------------------------------------------------------------------------------------------------------------------------------- d. Sale, August 31 (From Beginning Inventory) (1,220) ($5 each) d. Sale, August 31 (From Purchase May 1) (680) ($8 each) ----------------------------------------------------------------------------------------------------------------------------------- Ending Inventory on Aug. 31 a. Purchase, January 30 1,630 6.20 $10,106 c. Purchase, May 1 520 8.00 $ 4,160 Total 2,150 $14,266 ----------------------------------------------------------------------------------------------------------------------------------- Cost of Goods Purchased Transactions Units Unit Cost Amount Beginning inventory, January 1, 2009 1,800 $5.00 9,000 a. Purchase, January 30 2,500 6.20 15,500 c. Purchase, May 1 1,200 8.00 9,600 Total 34,100 --------------------------------------------------------------------------------------------------------------------- Cost of goods sold b. Sale, March 14 (From Beginning Inventory) (580) ($5 each) 2,900 Sale, March 14 (From Purchase Jan.30) (870) ($6.20each) 5,394 d. Sale, August 31 (From Beginning Inventory) (1,220) ($5 each) 6,100 d. Sale, August 31 (From Purchase May 1) (680) ($8 each) 5,440 Total 19,834 -------------------------------------------------------------------------------------------------------------------------- Note: From the above calculations – I hope your confusion will go away -
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