PART II Problem 2 TAMIU Company\'s record of transactions concerning part X for
ID: 2570501 • Letter: P
Question
PART II Problem 2 TAMIU Company's record of transactions concerning part X for the month of October was as follows. Purchases- Units and Unit Costs Sales Total Units Balance 100 October 5.00 400 5.10 300 5.30 200 5.35 6005.60 200 5.80 October 12 27 28 300 200 800 150 18 26 30 Instructions (a)Determine the inventory at October 30 on each of the following bases and Cost of Goods Sold Assume that periodic (without withdrawal) inventory records are kept in dollars. Carry unit costs to the nearest cent. (1) FIFO (2)LIFO (3)Average (b) If the perpetual inventory record is kept in dollars, and costs are computed at the time of each withdrawal (perpetual), what amount would be shown as ending inventory and Cost of Goods Sold in (I) and (2)? (I)FIFO (2)LIFOExplanation / Answer
Answer a.
Number of units in Beginning Inventory = 100
Cost of Beginning Inventory = 100 * $5.00 = $500
Number of units purchased = 400 + 300 + 200 + 600 + 200
Number of units purchased = 1,700
Cost of Goods purchased = 400 * $5.10 + 300 * $5.30 + 200 * $5.35 + 600 * $5.60 + 200 * $5.80
Cost of Goods purchased = 9,220
Number of units available for sale = Number of units in Beginning Inventory + Number of units purchased
Number of units available for sale = 100 + 1,700 = 1,800
Cost of Goods available for sale = Cost of Beginning Inventory + Cost of Goods purchased
Cost of Goods available for sale = $500 + $9,220
Cost of Goods available for sale = $9,720
Number of units sold = 300 + 200 + 800 + 150
Number of units sold = 1,450
Number of units in Ending Inventory = Number of units available for sale - Number of units sold
Number of units in Ending Inventory = 1,800 - 1,450
Number of units in Ending Inventory = 350
FIFO:
Cost of Goods sold = 100 * $5.00 + 400 * $5.10 + 300 * $5.30 + 200 * $5.35 + 450 * $5.60
Cost of Goods sold = $7,720
Ending Inventory = 150 * $5.60 + 200 * $5.80
Ending Inventory = $2,000
LIFO:
Cost of Goods sold = 200 * $5.80 + 600 * $5.60 + 200 * $5.35 + 300 * $5.30 + 150 * $5.10
Cost of Goods sold = $7,945
Ending Inventory = 250 * $5.10 + 100 * $5.00
Ending Inventory = $1,775
Average Costing:
Unit Cost = Cost of Goods available for sale / Number of units available for sale
Unit Cost = $9,720 / 1,800
Unit Cost = $5.40
Cost of Goods sold = 1,450 * $5.40
Cost of Goods sold = $7,830
Ending Inventory = 350 * $5.40
Ending Inventory = $1,890
Answer b.
FIFO:
October 5:
Number of units sold = 300
Cost of Goods Sold = 100 * $5.00 + 200 * $5.10
Cost of Goods Sold = $1,520
Ending Inventory = 200 * $5.10
Ending Inventory = $1,020
October 12:
Number of units sold = 200
Cost of Goods Sold = 200 * $5.10
Cost of Goods Sold = $1,520
Ending Inventory = 300 * $5.30
Ending Inventory = $1,590
October 27:
Number of units sold = 800
Cost of Goods Sold = 300 * $5.30 + 200 * $5.35 + 300 * $5.60
Cost of Goods Sold = $4,340
Ending Inventory = 300 * $5.60
Ending Inventory = $1,680
October 28:
Number of units sold = 150
Cost of Goods Sold = 150 * $5.60
Cost of Goods Sold = $840
Ending Inventory = 150 * $5.60 + 200 * $5.80
Ending Inventory = $2,000
LIFO:
October 5:
Number of units sold = 300
Cost of Goods Sold = 300 * $5.10
Cost of Goods Sold = $1,530
Ending Inventory = 100 * $5.00 + 100 * $5.10
Ending Inventory = $1,010
October 12:
Number of units sold = 200
Cost of Goods Sold = 200 * $5.30
Cost of Goods Sold = $1,060
Ending Inventory = 100 * $5.00 + 100 * $5.10 + 100 * $5.30
Ending Inventory = $1,540
October 27:
Number of units sold = 800
Cost of Goods Sold = 600 * $5.60 + 200 * $5.35
Cost of Goods Sold = $4,430
Ending Inventory = 100 * $5.00 + 100 * $5.10 + 100 * $5.30
Ending Inventory = $1,540
October 28:
Number of units sold = 150
Cost of Goods Sold = 150 * $5.80
Cost of Goods Sold = $870
Ending Inventory = 100 * $5.00 + 100 * $5.10 + 100 * $5.30 + 50 * $5.80
Ending Inventory = $1,830
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.