Samuelson and Messenger (S&M) began 2018 with 270 units of its one product. Thes

Question

Samuelson and Messenger (S&M) began 2018 with 270 units of its one product. These units were purchased near the end of 2017 for $24 each. During the month of January, 135 units were purchased on January 8 for $27 each and another 270 units were purchased on January 19 for $29 each. Sales of 130 units and 170 units were made on January 10 and January 25, respectively. There were 375 units on hand at the end of the month. S&M uses a periodic inventory system.

Required:
1. Calculate ending inventory and cost of goods sold for January using FIFO.
2. Calculate ending inventory and cost of goods sold for January using average cost.

Complete this question by entering your answers in the tabs below.

Required 1

Required 2

Calculate ending inventory and cost of goods sold for January using FIFO.

Complete this question by entering your answers in the tabs below.

Calculate ending inventory and cost of goods sold for January using average cost. (Round average cost per unit to 2 decimal places.)

FIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Ending Inventory - Periodic FIFO # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory Beginning Inventory 270 $24.00 $6,480 130 24.00 $3,120 105 $24.00 $2,520 Purchases: January 8 135 27.00 3,645 140 27.00 3,780 270 27.00 7,290 January 19 270 29.00 7,830 30 29.00 870 0 29.00 0 Total 675 $17,955 300 $7,770 375 $9,810

Explanation / Answer

2) Cost of goods available for sale = 270*24+135*27+270*29=17955

Weighted average cost per unit = 17955/675=26.6

Cost of goods sold = (170+130)*26.60= 7980

Ending inventory = 375*26.6= 9975

1) Calculation of inventory under FIFO method

Cost of goods sold

130*24=3120

140*24=3360

30*27=810

total=7290

ending inventory

105*27=2835

270*24=6480

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