At the end of January 2014, the records of Donner Company showed the following f
ID: 2446814 • Letter: A
Question
At the end of January 2014, the records of Donner Company showed the following for a particular item that sold at $18.80 per unit:
1. Compute Cost of Goods Sold under each method of inventory: average cost, FIFO, LIFO, and specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase. (Round unit price to 2 decimal places. Input all amounts as positive values.)
2.Prepare a partial income statement under each method of inventory: (a) average cost, (b) FIFO, (c) LIFO, and (d) specific identification. For specific identification, assume that the first sale was selected from the beginning inventory and the second sale was selected from the January 12 purchase.
At the end of January 2014, the records of Donner Company showed the following for a particular item that sold at $18.80 per unit:
Explanation / Answer
FIFO Method
Date
Perticulars
QTY
Rate
Amt
Perticulars
QTY
Rate
Amt
1.1.2014
opening Balance
710
5.50
3905
Sales
570
5.50
3135
12.1.14
Purchase
680
7.5
5100
Sales
200
6.1
1220
26.1.14
Purchase
240
9.5
2280
Total
1630
11285
770
4355
Cost of Good sold as per fifo method is 4355
As per LIfo method
Date
Perticulars
QTY
Rate
Amt
Perticulars
QTY
Rate
Amt
1.1.2014
opening Balance
710
5.50
3905
Sales
570
8.34
4755
12.1.14
Purchase
680
7.5
5100
Sales
200
7.5
1550
26.1.14
Purchase
240
9.5
2280
Total
1630
11285
770
6255
Cost of Goods sold as per LIFO method is 6255
Average Cost
Date
Perticulars
QTY
Rate
Amt
Perticulars
QTY
Rate
Amt
1.1.2014
opening Balance
710
5.50
3905
Sales
570
6.92
3946
12.1.14
Purchase
680
7.5
5100
Sales
200
6.92
1385
26.1.14
Purchase
240
9.5
2280
Total
1630
11285
770
5331
Cost of good sold as per average cost is 5331
Specific Identification Mehod
Cost of goods sold is same as per FIFO method as the movement of good is same as in FIFO method
Date
Perticulars
QTY
Rate
Amt
Perticulars
QTY
Rate
Amt
1.1.2014
opening Balance
710
5.50
3905
Sales
570
5.50
3135
12.1.14
Purchase
680
7.5
5100
Sales
200
6.1
1220
26.1.14
Purchase
240
9.5
2280
Total
1630
11285
770
4355
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