18 points) The ABC Company has the following inventory records: 2/1 Beginning ba

Question

18 points)

The ABC Company has the following inventory records:

2/1                        Beginning balance                    5@      $60                  $300

2/5                        Purchase                                  20@    50                   1,000

2/10          Sale                                          21

2/17          Purchase                                  12@    40                   480

2/23          Sale                                          14

2/25          Purchase                                  13@    30                   390

3/10          Purchase                                  16@    20                   320

3/15          Sale                                          30

3/19          Purchase                                  9@      10                   90

Required: For the above data set, please answer the following questions. Use the periodic inventory method. Compute, for each month separately, the cost of goods sold, using –

FIFO

LIFO

Weighted average

Explanation / Answer

Compute cost of goods sold for each month :

FIFO LIFO Weighted average February (300+1000+400) = 1700 (390+480+500)= 1370 (2170/50*35) = 1519 March (80+390+200) = 670 (90+320+150) = 560 (1061/40*30) = 795.75

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