Sarasota Company’s record of transactions concerning part X for the month of Apr

Question

Sarasota Company’s record of transactions concerning part X for the month of April was as follows. Purchases Sales April 1 (balance on hand) 350 @ $6.60 April 5 550 4 650 @ 6.73 12 450 11 550 @ 7.00 27 1,300 18 450 @ 7.06 28 150 26 850 @ 7.39 30 450 @ 7.66Calculate average-cost per unit.

Assume that perpetual inventory records are kept in units only.

Compute the inventory at April 30 on each of the following bases. Assume that perpetual inventory records are kept in units only. (1) First-in, first-out (FIFO). (2) Last-in, first-out (LIFO). (3) Average-cost.

If the perpetual inventory record is kept in dollars, and costs are computed at the time of each withdrawal, what amount would be shown as ending inventory under (1) FIFO, (2) LIFO and (3) Average-cost?

Explanation / Answer

Ending inventory is as computed below:

FIFO-Perpetual Date Goods Purchased Cost of goods sold Ending Inventory Units @ Cost per unit Cost of purchase Units sold @ Cost per unit Cost of goods sold Units @ Cost per unit Ending balance Apr-01 350 6.60 2,310 Balance 350 2,310 Apr-04 650 6.73 4,375 350 6.60 2,310 650 6.73 4,375 Balance 1,000 6,685 Apr-05 350 6.60 2,310 450 6.73 3,029 200 6.73 1,346 Balance 450 3,029 Apr-11 550 7 3,850 450 6.73 3,029 550 7 3,850 Balance 1,000 6,879 Apr-12 450 6.73 3,029 550 7 3,850 Balance 550 3,850 Apr-18 450 7.06 3,177 550 7 3,850 450 7.06 3,177 Balance 1,000 7,027 Apr-26 850 7.39 6,282 550 7 3,850 450 7.06 3,177 850 7.39 6,282 Balance 1,850 13,309 Apr-27 550 7 3,850 450 7.06 3,177 300 7.39 2,217 550 7.39 4,065 Balance 550 4,065 Apr-28 150 7.39 1108.5 400 7.39 2,956 Balance 400 2,956 Apr-30 450 7.66 3,447 400 7.39 2,956 450 7.66 3,447 Balance 2,950 21,130 2,450 17,037 850 6,403 LIFO-Perpetual Date Goods Purchased Cost of goods sold Ending Inventory Units @ Cost per unit Cost of purchase Units sold @ Cost per unit Cost of goods sold Units @ Cost per unit Ending balance Apr-01 350 6.60 2,310 Balance 350 2,310 Apr-04 650 6.73 4,375 350 6.60 2,310 650 6.73 4,375 Balance 1,000 6,685 Apr-05 550 6.73 3,702 350 6.60 2,310 100 6.73 673 Balance 450 2,983 350 6.60 2,310 Apr-11 550 7 3,850 100 6.73 673 550 7 3,850 Balance 650 4,523 Apr-12 450 7.00 3,150 350 6.60 2,310 100 6.73 673 100 7 700 Balance 550 3,683 Apr-18 450 7.06 3,177 350 6.60 2,310 100 6.73 673 100 7 700 450 7.06 3,177 Balance 1,000 6,860 Apr-26 850 7.39 6,282 350 6.60 2,310 100 6.73 673 100 7 700 450 7.06 3,177 850 7.39 6,282 Balance 1,850 13,142 Apr-27 850 7.39 6,282 350 6.60 2,310 450 7.06 3,177 100 6.73 673 100 7 700 Balance 550 3,683 Apr-28 100 7 700 350 6.60 2,310 50 6.73 336.5 50 6.73 337 Balance 400 2,647 Apr-30 450 7.66 3,447 350 6.60 2,310 50 6.73 337 450 7.66 3,447 Balance 2,950 21,130 2,450 17,347 850 6,094 Weighted Average -Perpetual Date Goods Purchased Cost of goods sold Ending Inventory Units @ Cost per unit Cost of purchase Units sold @ Cost per unit Cost of goods sold Units @ Cost per unit Ending balance Apr-01 350 6.60 2,310 Balance 350 2,310 Apr-04 650 6.73 4,375 350 6.60 2,310 650 6.73 4,375 Balance 1,000 6.68 6,685 Apr-05 550 6.68 3,676 450 6.68 3,008 Balance 450 3,008 Apr-11 550 7 3,850 450 6.68 3,008 550 7.00 3,850 Balance 1,000 6.86 6,858 Apr-12 450 6.86 3,086 550 6.86 3,772 Balance 550 6.86 3,772 Apr-18 450 7.06 3,177 550 6.86 3,772 450 7.06 3,177 Balance 1,000 6.95 6,949 Apr-26 850 7.39 6,282 1,000 6.95 6,949 850 7.39 6,282 Balance 1,850 7.15 13,230 Apr-27 1,300 7.15 9,297 550 7.15 3,933 Balance 550 3,933 Apr-28 150 7.15 1072.73625 400 7.15 2,861 Balance 400 2,861 Apr-30 450 7.66 3,447 400 7.15 2,861 450 7.66 3,447 Balance 2,950 21,130 2,450 17,132 850 7.42 6,308

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