Question

Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 30 units @ $110 Mar. 10 Purchase 40 units @ $122 Aug. 30 Purchase 30 units @ $130 Dec. 12 Purchase 100 units @ $132 There are 60 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar. Cost of Merchandise Inventory and Cost of Merchandise Sold Inventory Method Merchandise Inventory Merchandise Sold First-in, first-out (FIFO) $ $ Last-in, first-out (LIFO) Weighted average cost

Answer 1

	Unit	Unit Cost	Total Cost
Jan 1	30	110	3300
Mar 10	40	122	4880
Aug 30	30	130	3900
Dec 12	100	132	13200
Total	200		25280

Calculate following

	FIFO	LIFO	Average cost
Cost of ending inventory	60*132 = 7920	(3300+30*122) = 6960	25280/200*60 = 7584
Cost of goods sold	25280-7920 = 17360	25280-6960 = 18320	25280-7584 = 17696