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system. At the end of the annuai accounting period, December 31, the accounting

ID: 2549007 • Letter: S

Question

system. At the end of the annuai accounting period, December 31, the accounting records for the most popular item in inventory showed the following $5.00 Beginning inventory, January 1 Transactions during the yoar a Purchase, January 30 b. Purchase, May 1 C. Sale ($7 each) d Sale ($7 each) 4 00 6.00 520 1220 (760) Required: a. Compute the amount of goods available for sale. b. & c. Compute the amount of ending inventory and cost of goods sold at December 31, under Average cost, First-in, first-out, Last-in, first-out and Specific identification inventory costing methods. For assume that the first sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of Ja ance from the purchase of May 1. (Do not round intermediate calculations. Round "Average Cost and Specific Identification" answers to 2 decimal places.) First-n, Last-in, Specific First-Out First-Out Identification Ending inventory Cost of goods sold

Explanation / Answer

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a) Cost of goods available for sale $            6,860 Explanation Units Rate Amount Beginning inventory 460 $          5.00 $        2,300 Purchases 360 $          4.00 $        1,440 Purchases 520 $          6.00 $        3,120 Cost of goods available for sale 1340 $          5.12 $        6,860 b) Average cost FIFO LIFO Specific Ending inventory $      1,842.99 $        2,160 $        1,800 $ 1,704.00 Cost of goods sold $      5,017.01 $        4,700 $        5,060 $ 5,156.00 Specific identification First sales Second sales Total Units available Balance left Rate Ending inventory Beginning 88 372 460 460 0 $                           5 $             -   Purchase, Jan 30 132 132 360 228 $                           4 $         912 Purchase, May 1 388 388 520 132 $                           6 $         792 $      1,704