The Madoff Company sells of the inventory purchases and sales of Wolf for the mo

Question

The Madoff Company sells of the inventory purchases and sales of Wolf for the month of March. Madoff Company the periodic inventory system many products. Wolf is one of its popalar items. Below is an analysis uses 3/1 Beginning inventory S0.80 1,500 6,000$0.84 3/4 Sales 3/16 Purchase 3/25 Purchase 3/30 Sales 3.000 S0.88 4.500$0.96 4,000 Instructions assumption, calculate the ending inventory and cost of goods sold for March (Show and label computations.) Ending inventory cost of goods sold (b) Using the Average Cost assumption, calculate the ending inventory and cost of goods sold for (Show and label computations. Perform all calculations to two decimal places.) Ending inventory_ cost of goods sold (c) Using the FIFO assumption, calculate the ending inventory and cost of goods sold for (Show and label computations.) Ending inventory cost of goods sold

Explanation / Answer

a) LIFO Units available for sale= 1500+6000+3000+4500=15000 Units sold=5000+4000=9000 Ending inventory=15000-9000=6000 Cost of goods sold Units Unit cost Total Sale from purchase 3/25 4500 0.96 4320 Sale form purchase 3/16 3000 0.88 2640 Sale from purchase 3/3 1500 0.84 1260 9000 8220 So correct answer is $1720 Ending inventory Units Unit cost Total Inventory from beginning inventory 1500 0.8 1200 Inventory from purchase 3/3 4500 0.84 3780 6000 4980 Ending inventory is $4980 Cost of goods sold=$8220 b)Average cost: Units available for sale= 1500+6000+3000+4500=15000 Units sold=5000+4000=9000 Ending inventory=15000-9000=6000 Average cost per unit= cost of goods available for sale/total units available                                             =(1500*0.8+6000*0.84+3000*0.88+4500*0.96)/15000=13200/15000=$0.88 Cost of goods sold= 9000*0.88=$7920 Ending inventory= 6000*0.88=$5280 c) FIFO Units available for sale= 1500+6000+3000+4500=15000 Units sold=5000+4000=9000 Ending inventory=15000-9000=6000 Cost of goods sold Units Unit cost Total Sale from beginning inventory 1500 0.8 1200 sSale from purchase 3/3 6000 0.84 5040 Sale from purchase 3/16 1500 0.88 1320 9000 7560 Ending inventory Units Unit cost Total Inventory from purchase 3/16 1500 0.88 1320 Inventory from purchase 3/25 4500 0.96 4320 6000 5640 Ending inventory is $5640 Cost of goods sold=$7560

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