E7-5 Calculating Cost of Ending Inventory and Cost of Goods Sold under Periodic

Question

E7-5 Calculating Cost of Ending Inventory and Cost of Goods Sold under Periodic FIFO, LIFO, and Weighted Average Cost [LO 7-3] 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 if it uses a periodic inventory system. Assume Oahu Kiki's records show the following for the month of January. Sales totaled 300 units. Date Units Unit Cost Total Cost Beginning Inventory January 1 220 $ 80 $17,600 Purchase Purchase 27,900 29,700 January 15 310 90 January 24 270 110 Required 1. Calculate the number and cost of goods available for sale. Number of Goods Available for Sale units Cost of Goods Available for Sale 2. Calculate the number of units in ending inventory 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

Explanation / Answer

1 Number of goods available for sale: Beginning inventory 220 Add:Purchase Jan-15 310 Jan-24 270 Number of goods available for sale 800 Cost of goods available for sale: Cost of beginning inventory 17600 Add:Cost of purchases Jan-15 27900 Jan-24 29700 Cost of goods available for sale 75200 2 Number of units in ending inventory: Number of goods available for sale 800 Less:Number of units sold 300 Units in ending inventory 500 3 Cost of ending inventory and cost of goods sold a) FIFO We assume that goods purchased first are sold first Units sold=300 Units in ending inventory=500 Cost of goods sold: Unit Rate Total Sales from Jan 1 inventory 220 80 17600 Sales from Jan 15 purchase 80 90 7200 300 24800 Cost of ending inventory: Unit Rate Total Inventory from Jan 15 purchase 230 90 20700 (310-80) Inventory from Jan 24 purchase 270 110 29700 500 50400 b) LIFO We assume that goods purchased last are sold first Units sold=300 Units in ending inventory=500 Cost of goods sold: Unit Rate Total Sales from Jan 24 purchase 270 110 29700 Sales from Jan 15 purchase 30 90 2700 300 32400 Cost of ending inventory: Unit Rate Total Inventory from Jan 15 purchase 280 90 25200 (310-30) Inventory from Jan 1 inventory 220 80 17600 500 42800 c) Weighted average cost method: Weighted average cost per unit=cost of goods available for sale/Number of goods available for sale=75200/800=$94 per unit Cost of goods sold=Number of units sold*Weighted average cost per unit=300*94=28200 Cost of ending inventory=Number of units in ending inventory*Weighted average cost per unit=500*94=47000 Cost of Ending inventory Cost of goods sold FIFO 50400 24800 LIFO 42800 32400 Weighted average cost 47000 28200

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.