Question

opero nome Help 1 Smalley, Inc., purchased items of inventory as follows. Jan. 4 Jan. 23 100 units @ $2.10 120 units @ $2.25 eBook References Smalley sold 50 units on January 28. Compute the cost of goods sold for the month under the FIFO inventory method. Cost of goods sold

Answer 1

Ans.1.

Cost of Goods Sold

First units to get sold would be the once that were purchased on Jan 4.

COGS = 50 units x $2.10 = $105

Ans2.

Cost of Goods Sold

12 units Purchased on Dec 12 @ $ 21 + 3 units Purchased on Dec 2 @ $20

(12 x $ 21) +( 3 x $20 ) = $312 (the most recent costs are taken)

Ans3.

Ending Inventory

100 units @ $3.05 = $ 305

150 units @ $3.10 = $465

120 units @ $3.15 = $378

370 units $1,148

Average cost per unit = $1,148 / 370 units = $3.10 per unit

By the end of May, Fox had sold 125 units, so there are 245 units in ending inventory.

Ending inventory: (370 units - 125 units) x $3.10

245 units x $ 3.10 = $760

Ans4.

a.

1)

To calculate cost of goods sold:

COGS= No. of units × cost per unit

COGS= (500 × $29) + (500 × $32)

= $14,500 + $16,000

= $30,500

Date	Accounts Title and Explanation	Debit	Credit
15-01-2018	Cost of Goods Sold	$        30,500.00
	Inventory		$   30,500.00
	[To record cost of 1,000 Ace-5 reels sold]

2)

To calculate cost of goods sold:

Weighted average cost per unit= Total cost / No. of units

= $46,200 /1500 = $ 30.8

COGS = 1,000 x $ 30.8 = $ 30,800

Date	Accounts Title and Explanation	Debit	Credit
15-01-2018	Cost of Goods Sold	$        30,800.00
	Inventory		$   30,800.00
	[To record cost of 1,000 Ace-5 reels sold]

3)

To calculate cost of goods sold:

= 600 x $ 29 + 400 x $32 = $ 30,200

Date	Accounts Title and Explanation	Debit	Credit
15-01-2018	Cost of Goods Sold	$        30,200.00
	Inventory		$   30,200.00
	[To record cost of 1,000 Ace-5 reels sold]

4)

To calculate cost of goods sold:

= 900 x $ 32 + 100 x $29 = $ 31,700

Date	Accounts Title and Explanation	Debit	Credit
15-01-2018	Cost of Goods Sold	$        31,700.00
	Inventory		$   31,700.00
	[To record cost of 1,000 Ace-5 reels sold]

b.

1)Specific identification method:

	Purchase			Sold			Balance
Date	Units	Unit Cost	Total	Units	Unit Cost	Cost of Goods Sold	Units	Unit Cost	Total
12-Dec	600	$         29.00	$ 17,400.00				600	$           29.00	$       17,400.00
9-Jan	900	$         32.00	$ 28,800.00				600	$           29.00
							900	$           32.00	$       46,200.00
15-Jan				500	$              29.00		100	$           29.00
				500	$              32.00	$     30,500.00	400	$           32.00	$       15,700.00

2.Average-cost method:

	Purchase			Sold			Balance
Date	Units	Unit Cost	Total	Units	Unit Cost	Cost of Goods Sold	Units	Unit Cost	Total
12-Dec	600	$         29.00	$ 17,400.00				600	$           29.00	$       17,400.00
9-Jan	900	$         32.00	$ 28,800.00				1500	$           30.80	$       46,200.00
15-Jan				1000	$              30.80	$     30,800.00	500	$           30.80	$       15,400.00

3.First-in, first-out (FIFO) method:

	Purchase			Sold			Balance
Date	Units	Unit Cost	Total	Units	Unit Cost	Cost of Goods Sold	Units	Unit Cost	Total
12-Dec	600	$         29.00	$ 17,400.00				600	$           29.00	$       17,400.00
9-Jan	900	$         32.00	$ 28,800.00				600	$           29.00
							900	$           32.00	$       46,200.00
15-Jan				600	$              29.00
				400	$              32.00	$     30,200.00	500	$           32.00	$       16,000.00

4. Last-in, first-out (LIFO) method:

	Purchase			Sold			Balance
Date	Units	Unit Cost	Total	Units	Unit Cost	Cost of Goods Sold	Units	Unit Cost	Total
12-Dec	600	$         29.00	$ 17,400.00				600	$           29.00	$       17,400.00
9-Jan	900	$         32.00	$ 28,800.00				600	$           29.00
							900	$           32.00	$       46,200.00
15-Jan				900	$              32.00
				100	$              29.00	$     31,700.00	500	$           29.00	$       14,500.00