in it\'s first month of operations, queensland inc. made three purchases of merc
ID: 2571476 • Letter: I
Question
in it's first month of operations, queensland inc. made three purchases of merchandise in the following sequence: (1) 370 units at $9 each, (2) 700 units at $12 each, (3) 800 units at $11 each. A physical inventory count determined there was 600 units on hand at the end of the month. assuming queensland uses a periodic inventory system, calculate the cost of the ending inventory system and cost of goods sold using (a) FIFO and (b) average cost.( for average cost, use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer)
Explanation / Answer
(a)
FIFO (Periodic)
Receipts
Cost of Goods Sold
Balance
Description
Qty
Rate
Amount
Qty
Rate
Amount
Qty
Rate
Amount
Purchases
370
$9
$3,330
370
$9
$3,330
Purchases
700
$12
$ 8,400
700
$12
$8,400
Purchases
800
$11
$ 8,800
800
$11
$8,800
Goods available for sale
1,870
$ 20,530
Sold
370
$9
$3,330
Sold
700
$12
$8,400
Sold
200
$11
$ 2,200
600
$11
$6,600
Ending
1,870
$20,530
1,270
$13,930
600
$ 6,600
Cost of goods sold = $ 13,930
Cost of ending Inventory = $ 6,600
(b)
Weighted average(Periodic)
Receipts
Cost of Goods Sold
Balance
Description
Qty
Rate
Amount
Qty
Rate
Amount
Qty
Rate
Amount
Purchases
370
$9
$3,330
Purchases
700
$12
$ 8,400
Purchases
800
$11
$ 8,800
Goods available for sale
1,870
$ 11
Sold
1,270
$11
$13,943
600
$11
$6,587
Ending
1,870
$20,530
1,270
$ 13,943
600
$6,587
Cost of goods sold = $ 13,942.83
Cost of ending Inventory = $ 6,587.13
FIFO (Periodic)
Receipts
Cost of Goods Sold
Balance
Description
Qty
Rate
Amount
Qty
Rate
Amount
Qty
Rate
Amount
Purchases
370
$9
$3,330
370
$9
$3,330
Purchases
700
$12
$ 8,400
700
$12
$8,400
Purchases
800
$11
$ 8,800
800
$11
$8,800
Goods available for sale
1,870
$ 20,530
Sold
370
$9
$3,330
Sold
700
$12
$8,400
Sold
200
$11
$ 2,200
600
$11
$6,600
Ending
1,870
$20,530
1,270
$13,930
600
$ 6,600
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