Question

Tutor 7 PT Lafayette has 450 units with a total of $27,000 in inventory balance at the beginning of August 2019. Aug 3 Lafayette purchased 3800 units merchandise for $285,000 from Superbowl Supplier and Co. Freight is $19,000. FOB Shipping point. 7 Lafayette returned 150 units to Superbowl Supplier and Co. @$80. 10 Lafayette paid their debt to Superbowl Supplier and Co. 13 Purchase 1850 units @$85 19 Lafayette sells 3000 units of merchandise to Chivas for $432,000. Freight is $9,000, FOB Shipping Point 22 Chivas returned 570 of damaged goods @$80,370 29 Chivas paid their debt Questions 1 Calculate the COGS and ending inventory with: a. Moving Average Method b. Weighted Average Method 2 Assume Lafayette use a FIFO method. Calculate the COGS and ending inventory with: a. Perpetual Method b. Periodic Method 3 Calculate the Inventory turnover and days in inventory for August using the COGS from perpetual FIFO.

Answer 1

Calculation of ending inventory using Moving average method
Date	Particulars	Qty	Moving average cost per unit	Amt in $	Remarks
01-Aug	Opening inventory	450.00	60.00	27,000.00
03-Aug	Purchases	3,800.00	80.00	304,000.00	Includes Freight
		4,250.00	77.88	331,000.00
07-Aug	Goods returned	(150.00)	77.88	(11,682.35)
		4,100.00	77.88	319,317.65
13-Aug	Purchases	1,850.00	85.00	157,250.00
		5,950.00	80.10	476,567.65
19-Aug	Sales	(3,000.00)	80.10	(240,286.21)
		2,950.00	80.10	236,281.44
22-Aug	Sales return	570.00	80.10	45,654.38
	Closing stock	3,520.00	80.10	281,935.82
	COGS			240,286.00
Calculation of ending inventory using Weighted average method
Date	Particulars	Qty	Weighted average cost per unit	Amt in $
01-Aug	Opening inventory	450.00	60.00	27,000.00
03-Aug	Purchases	3,650.00	83.29	304,000.00
13-Aug	Purchases	1,850.00	85.00	157,250.00
		5,950.00	82.06	488,250.00
19-Aug	Sales	2,430.00	214.56	521,380.00
	Closing stock as per weighted average method	3,520.00	82.06	288,847.06
	COGS as per weighted average method	2,430.00	82.06	199,402.94