E7-5 Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and A

Question

E7-5 Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2 Penn Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost 1.990$4 Inventory, December 31, prior year For the current year. Purchase, March 21 Purchase, August 1 5,120 2,880 Inventory, December 31, current year 4,130 Required Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Round "Average cost per unit" to 2 decimal places and final answers to nearest whole dollar amount.) FIFO LIFO Average Cost Ending inventory Cost of goods sold

Explanation / Answer

Calculate ending inventory and cost of goods sold :

FIFO LIFO Average cost Ending inventory (2880*7+1250*6)=27660 (1990*4+2140*6) = 20800 (58840/9990*4130) = 24325 Cost of goods sold (3870*6+1990*4) = 31180 (2980*6+2880*7) = 38040 (58840-24325)=34515

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