chrome File Edit View History Bookmarks People Window HelpSee -HYPEBEAST Drtving
ID: 2570356 • Letter: C
Question
chrome File Edit View History Bookmarks People Window HelpSee -HYPEBEAST Drtving Culture ×, D Chapter Apps ÷PSU login 11 Nett Cascade D Blood DatPitf Tylenol Scholarship E7-7 Analyzing andeung the Financial Statement Effects of FIFO, LIFO, and Scoresby Inc. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Unit Cost $ 8 a. Inventory, Beginning 3,000 For the year b. Purchase, March 5 c. Purchase, September 19 d. Sale, April 15 (sold for $29 per unit) e. Sale, October 31 (sold for $31 per unit) f. Operating expenses (excluding income tax expense), $250,000 9,500 9 5,000 4,000 8,000 Required: 1. Calculate the number and cost of goods available for sale. Number of Goods Available for Sale Cost of Goods Available for Sale units 2. Calculate the number of units in ending inventory units 3. Compute the cost of ending inventory and cost of goods sold under (a) FIFO, (b) LIFO, and (Gl weightedExplanation / Answer
1. Number of goods available for sale = Opening inventory in units + Purchase of goods in units
= 3,000 + 9,500 + 5,000 = 17,500 units
Cost of goods available for sale = Amount of beginning inventory + Purchase amount of goods
= (3,000 x 8) + (9,500 x 9) + (5,000 x 11) = $164,500
2. Calculation of Number of units of ending Inventory
Ending Inventory = Opening Inventory + Purchase during the year - units sold
= 3,000 + 9,500 + 5,000 - 4,000 - 8,000 = 5,500 units
3. a. FIFO Method - Ending inventory will be from the purchases made at last. Therefore
Cost of ending inventory = (5,000 x 11) + (500 x 9) = $59,500
Cost of Goods Sold = opening inventory + Purchase - closing inventory
= 24,000 + 85,500 + 55,000 - 59,500 = $105,000
b. LIFO Method - Ending inventory will be from the opening inventory in previous year and first purchases made in the year.
Cost of ending inventory = (3,000 x $8) + (2,500 x $9) = $46,500
Cost of goods sold = Opening inventory + purchase - closing inventory
= 24,000 + 85,500 + 55,000 - 46,500 = $118,000
c. Weighted average cost
Weighted average cost per unit = Cost of goods available for sale / number of units available for sale
= 164,500 / 17,500 = $9.4 per unit
Closing Inventory cost = 5,500 units x $9.4 per unit = $51,700
Cost of goods sold = 24,000 + 85,500 + 55,000 - 51,700 = $112,800
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.