E6.7B. Inventory Costing Methods Periodic Method The Toon Company, which uses th

Question

E6.7B. Inventory Costing Methods Periodic Method The Toon Company, which uses the periodic in- LO2 ventory system, has the following records: Units Unit Cost $49 42 Dec. 28. . . .200 Ending inventory was 360 units. Compute the ending inventory and the cost of goods sold for the year using (a) first-in, first out, (b) weighted-average cost, and (c) last-in, first-out. Lo2 E6-8B. Inventory Costing Methods-Periodic Method The following data are for the Miller Corporation, which sells just one product: Et Units Unit Cost Beginning inventory, January 1 Purchases February 11 200 $12 13 15 17 100 March 1 July 1 Sales Calculate the value of ending inventory and cost of goods sold using the periodic method and (a) first- in, first-out, (b) last-in, first-out, and (c) weighted-average cost method. Round your final answers to the nearest dollar.

Explanation / Answer

Toon Company Units available for sales 1500 Units sold 1140 Ending Inventory 360 FIFO Method 200 units @36 $    7,200.00 160 units @38 $    6,080.00 The cost of inventory under Periodic FIFO Method $ 13,280.00 Cost of goods sold=(100 Units @$49+$650 Units @$42+390 Units @38) $ 47,020.00 LIFO METHOD 100 units @49 $    4,900.00 160 units @42 $    6,720.00 The cost of inventory under Periodic LIFO Method $ 11,620.00 Cost of goods sold=(200 Units @$36+$550 Units @$38+390 Units @42) $ 44,480.00 Weighted Average Method Cost per unit Average cost per unit=(100*49+650*42+550*38+200*36)/1500 $          40.20 The cost of inventory under Periodic weighted Average Method=360*$40.20 $ 14,472.00 Cost of goods sold=(1140 Units@$40.20) $ 45,828.00 Miller Corporation Units available for sales=(200+500+400+100) 1200 Units sold=(350+400) 750 Ending Inventory 450 FIFO Method 350 units @15 $    5,250.00 100 units @17 $    1,700.00 The cost of inventory under Periodic FIFO Method $    6,950.00 Cost of goods sold on March 1st=(200 Units @$12+$150 Units @$13) $    4,350.00 Cost of goods sold on July 1st=(350 Units @$13+50 Units @$15) $    5,300.00 Total cost of goods sold of 750 units sold $    9,650.00 LIFO METHOD 200 units @12 $    2,400.00 150 units @13 $    1,300.00 100 Units@17 $    1,700.00 The cost of inventory under Periodic LIFO Method $    5,400.00 Cost of goods sold on March 1st=(350 Units @$13) $    4,550.00 Cost of goods sold on July 1st=(400 Units @$15) $    6,000.00 Total cost of goods sold of 750 units sold $ 10,550.00 Weighted Average Method Cost per unit Average cost per unit=(200*12+500*13+400*15+100*17)/1200 $          13.83 The cost of inventory under Periodic weighted Average Method=450*$13.83 $    6,225.00 Cost of goods sold=(750 Units@$40.20) $ 10,372.50 E6-5b Correct Cost of Goods sold Cost of goods sold=Beginning Inventory+Purchases-Closing Inventory 2015 2016 Beginning Inventory 75000 25000 Cost of goods purchased 500000 540000 Cost of goods available for sales 575000 565000 Less: Closing Inventory=(55000-30000) in 2015,(85000+18000) in 2016 25000 103000 Cost of goods sold 550000 462000

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