Ferris Company began 2018 with 9,000 units of its principal product. The cost of
ID: 2553350 • Letter: F
Question
Ferris Company began 2018 with 9,000 units of its principal product. The cost of each unit is $8. Merchandise transactions for the month of January 2018 are as follows: Purchases Date of Purchase Units Unit Cost* Total Cost Jan. 10 6,000 $ 9 $ 54,000 Jan. 18 9,000 10 90,000 Totals 15,000 144,000 *Includes purchase price and cost of freight. Sales Date of Sale Units Jan. 5 5,000 Jan. 12 3,000 Jan. 20 6,000 Total 14,000 10,000 units were on hand at the end of the month. Required: Calculate January's ending inventory and cost of goods sold for the month using each of the following alternatives: 1. FIFO, periodic system. 2. LIFO, periodic system. 3. LIFO, perpetual system. 4. Average cost, periodic system. 5. Average cost, perpetual system.
Explanation / Answer
Answer
FIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
9000
8
72000
9000
8
72000
0
8
0
Purchases:
Jan-10
6000
9
54000
5000
9
45000
1000
9
9000
Jan-18
9000
10
90000
0
10
0
9000
10
90000
0
0
0
0
0
0
0
0
0
0
0
0
TOTAL
24000
216000
14000
117000
10000
99000
LIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
9000
8
72000
0
8
0
9000
8
72000
Purchases:
Jan-10
6000
9
54000
5000
9
45000
1000
9
9000
Jan-18
9000
10
90000
9000
10
90000
0
10
0
0
0
0
0
0
0
0
0
0
0
0
0
0
TOTAL
24000
216000
14000
135000
10000
81000
LIFO
Opening + Purchases
Cost of Goods Sold
Closing Inventory
Beg Inventory
9000
8.00
72000
9000
8.00
72000.00
Sale Jan 5
0
5000
8.00
40000
4000
8.00
32000.00
0.00
Purchase Jan 10
6000
9.00
54000
4000
8.00
32000.00
0
0
6000
9.00
54000.00
0.00
Sale Jan 12
3000
9.00
27000
4000
8.00
32000.00
0
3000
9.00
27000.00
0
0.00
Purchase Jan 18
9000
10.00
90000
4000
8.00
32000.00
0
3000
9.00
27000.00
9000
10.00
90000.00
Sale Jan 20
6000
10.00
60000
4000
8.00
32000.00
0
3000
9.00
27000.00
3000
10.00
30000.00
TOTAL
24000
216000.00
14000
127000.00
10000
89000
Average Method
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
9000
8
72000
Purchases:
Jan-10
6000
9
54000
Jan-18
9000
10
90000
0
0
TOTAL
24000
9
216000
14000
9
126000
10000
9
90000
Weighted Average cost
Opening + Purchases
Cost of Goods Sold
Closing Inventory
Beginning Inventory
9000
8
72000
9000
8.00
72000.00
Sale Jan 5
5000
8.00
40000.00
4000
8.00
32000.00
Purchase Jan 10
6000
9.00
54000
10000
8.60
86000.00
Sale Jan 12
3000
8.60
25800.00
7000
8.60
60200.00
Purchase Jan 18
9000
10.00
90000
16000
9.3875
150200.00
Sale Jan 20
6000
9.3875
56325.00
10000
9.3875
93875.00
TOTAL
24000
216000.00
14000
122125.00
10000
9.3875
93875
FIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
9000
8
72000
9000
8
72000
0
8
0
Purchases:
Jan-10
6000
9
54000
5000
9
45000
1000
9
9000
Jan-18
9000
10
90000
0
10
0
9000
10
90000
0
0
0
0
0
0
0
0
0
0
0
0
TOTAL
24000
216000
14000
117000
10000
99000
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