1500 points Ferris Company began 2016 with 4,000 units of its principal product.

Question

1500 points Ferris Company began 2016 with 4,000 units of its principal product. The cost of each unit is $6 Merchandise transactions for the month of January 2016 are as follows: Purchases Date of Purchase Jan. 10 Jan. 18 Units Unit Cost Total Cost 3,000 S 7 $21,000 4.:000 832000 Totals 7 000 $53,000 *Includes purchase price and cost of freight Sales Date of Sale Jan. 5 Jan 12 Jan. 20 Units 2:000 1000 3,000 Total 6000 5,000 units were on hand at the end of the month Required: alternatives Caiqulate January's endinglinventory and cost of gooda sold for the month usng sach ofthe following

Explanation / Answer

FIFO DATE Cost of goods available for sale Cost of Goods sold Closing inventory Units Rate Amount Units Rate Amount Units Rate Amount Beginning Inventory 4000 6 24000 4000 6 24000 Purchase 10-Jan 3000 7 21000 2000 7 14000 1000 7 7000 18-Jan 4000 8 32000 4000 8 32000 Total 11000 77,000 6000 38000 5000 39000 LIFO DATE Cost of goods available for sale Cost of Goods sold Closing inventory Units Rate Amount Units Rate Amount Units Rate Amount Beginning Inventory 4000 6 24000 4000 6 24000 Purchase 10-Jan 3000 7 21000 2000 7 14000 1000 7 7000 18-Jan 4000 8 32000 4000 8 32000 Total 11000 77,000 6000 46,000 5000 31000 Average DATE Cost of goods available for sale Cost of Goods sold Closing inventory Units Rate Amount Units Rate Amount Units Rate Amount Beginning Inventory 4000 6 24000 Purchase 10-Jan 3000 7 21000 18-Jan 4000 8 32000 Total 11000 77,000 6000 7 42,000 5000 7 35,000 Average cost per unit = Totalcost of goods available / total units available ( 77,000 / 11,000 ) = $ 7 per unit LIFO-Perpetual DATE Cost of goods available for sale Cost of Goods sold Closing inventory Units Rate Amount Units Rate Amount Units Rate Amount Beginning Inventory 4000 6 24000 2000 6 12000 2000 6 12000 Purchase 10-Jan 3000 7 21000 1000 7 7000 2000 7 14000 18-Jan 4000 8 32000 3000 8 24000 1000 8 8000 Total 11000 77,000 6000 43,000 5000 34000 Perpetual-Average Inventory on hand Cost of Goods sold Units Rate Amount Units Rate Amount Beginning Inventory 4000 6 24000 Less: Sales Jan 5 2000 6 12000 2000 6 12000 Subtotal Average cost 2000 6 12000 Add: Purchase jan10 3000 7 21000 Subtotal Average cost 5000 6.6 33,000 Less: Sales jan 12 1000 6.6 6,600 1000 6.6 6,600 Subtotal Average cost 4000 6.6 26,400 Add: Purchase Jan 18 4000 8 32000 Subtotal Average cost 8000 7.3 58400 Less: Sales jan 20 3000 7.3 21900 3000 7.3 21900 Total 5000 7.3 36500 6000 6.75 40500

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