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Safari File Edit View History Bookmarks Window Help ezto mheducation.com Week 8-Inventory Pt 2 HL I Neo E7-5 Calculating Cost of Ending Inventory and Cost of Goods Sold under Periodi Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as it uses a periodic inventory system. Assume Oahu Kikis records show the following for the month of January. Sales totaled 290 units. Date Units Unit Cost Total Cost Beginning InventoryJanuary 1 240 $70 $16,800 36,000 21,000 Purchase Purchase January 15 450 80 January 24 210 100 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. Caloulate the number of units in ending inventory units 3. Calculate the cost of ending inventory and cost of goods sold using the (a) FIFO·(b) LIFO, and (c) weighted average cost methods Cost of Ending Inventory Cost of Goods Sold FIFO LIFO Weighted Average Cost 13Explanation / Answer
Answer:
1
Calculate the number and cost of goods available for sale
Goods Available for Sale
900
Units
Cost of Goods Available for Sale
73800
Dollar
Working notes for the above answer is as under
Units
Unit
Total
Cost
Cost
Beginning Inventory
240
70
16800
+ Purchase (Jan 15)
450
80
36000
+ Purchase (Jan 24)
210
100
21000
Goods Available for Sale
900
73800
________________________________________________________
2
Ending invemtory
610
Units
Working notes for the above answer is as under
Goods Available for Sale
900
Units
Less:
Units sold
290
Units
Ending invemtory
610
Units
_____________________________________________________-
3
Cost of
ending inventory
Cost of Goods Sold
FIFO
53000
20800
LIFO
46400
27400
Weifhted AveraGe
50020
23780
Working notes for the above answer is as under
a. FIFO
Total
amount
ending Inventory
(210 units x $100)
21000
(400 units x $ 80)
32000
53000
Cost of Goods Sold
(240 units x $70)
16800
(50 units x $80)
4000
20800
b. LIFO
ending Inventory
(240 units x $70)
16800
(370 units x $80)
29600
46400
Cost of Goods Sold
(210 units x $100)
21000
(80 units x $ 80)
6400
27400
Average Unit Cost
$73,800 / 900 units
= $82
Ending Inventory
(610 units x $82)
= $50020
Cost of Goods Sold
(290 units x $82)
= $23780
Goods Available for Sale
900
Units
Cost of Goods Available for Sale
73800
Dollar
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