Scrappers Supplies tracks the number of units purchased and sold throughout each

Question

Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31 Units Unit Cost 220 $26 Beginning inventory, January 1 Transactions during the year a. Purchase on account, March2 b. Cash sale, April 1 ($42 each) C. Purchase on account, June 30 d. Cash sale, August 1 ($42 each) 28 310 (370) 270 (90) 32 TIP: Although the purchases and sales are listed in chronological order, Scrappers determines the cost of goods sold after all of the purchases have occurred. Required: 1. Compute the cost of goods available for sale, cost of ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round "Cost per Unit" to 2 decimal places.) a. Last-in, first-out IFO (Periodic) Cost perTotal Units Unit Beginning Inventory Purchases March 2 June 30 Total Purchases Goods Available for Sale Cost of Goods Sold Units from Beginning Inventory Units from March 2 Purchase Units from June 30 Purchase Total Cost of Goods Sol Ending Inventory

Explanation / Answer

Calculate following under LIFO periodic method :

Units Cost per unit Total Beginning inventory 220 26 5720 Purchases March 2 310 28 8680 June 30 270 32 8640 Total purchases 800 23040 Goods available for sale Cost of goods sold Units from march 2 purchases 190 28 5320 Units from June 30 purchases 270 32 8640 Total cost of goods sold 460 13960 Ending inventory 340 9080

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