PB7-1 Analyzing the Effects of Four Alternative Inventory Methods in a Periodic
ID: 2518604 • Letter: P
Question
PB7-1 Analyzing the Effects of Four Alternative Inventory Methods in a Periodic Inventory System [LO 7-3] Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory’s selling price is $12 per unit. Transactions Unit Cost Units Total Cost Inventory, January 1 $ 4.00 190 $ 760 Sale, January 10 (150 ) Purchase, January 12 4.50 240 1,080 Sale, January 17 (110 ) Purchase, January 26 5.50 70 385 Assuming that for Specific identification method (item 1d) the January 10 sale was from the beginning inventory and the January 17 sale was from the January 12 purchase. Required: 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January 31 under each of the following inventory costing methods: (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)
Explanation / Answer
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Unit Cost Unit Total Cost Sold Units Jan 1 Beginning 4 190 760 Jan 10 Sale -150 Jan 12 Purchase 4.5 240 1080 Jan 17 Sale -110 Jan 26 Purchase 5.5 70 385 Total Pruchase 500 Sale 260 Closing 240 Goods Availabel for Sale $ Ending inventory $ Cost of goods sold $ Weighted Average 2225 1068 1157 240*4.45 260*4.45 FIFO 2225 1150 1075 LIFO 2225 1270 1240 Specific ID 2225 1130 1095 Working: Weighted Average Goods Available for sale 760+1080+385=2225 Average Purchase Price: Total Purchase Cost 760+1080+385=2225 Total Purchase Units 190+240+70=500 Weighted Average Cost 2225/500=4.45 FIFO: Cost of Goods Sold: Units Cost Total Cost 190 4 760 70 4.5 315 260 1075 Ending Inventory Units Cost Total Cost 170 4.5 765 70 5.5 385 240 1150 LIFO Cost of Goods Sold: Units Cost Total Cost 70 5.5 385 190 4.5 855 260 1240 Ending Inventory Units Cost Total Cost 50 4.5 225 190 5.5 1045 240 1270 Specific Id Cost of Goods Sold: Units Cost Total Cost 150 4 600 110 4.5 495 260 1095 Ending Inventory Units Cost Total Cost 40 4 160 130 4.5 585 70 5.5 385 240 1130Related Questions
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