Question

Kegin Company sells many products. Whamo is one of its popular items. Below is an analysis of the inventorY purchases and sales of Whamo for the month of March. Kegin Company uses the perpetual inventory system. Purchases Sales Unit Cost Units Selling Price/Unit 3/1 Beginning inventory $40 00T 3/3 Purchase $50 09 3/4 Sales 0$ 3/10 Purchase $55 007 3/16 Sales 06$ 08 3/19 Sales 06$ 09 3/25 Sales 06$ Purchase 3/30 09$ Instructions (a) Using the FIFO assumption, calculate the amount charged to cost of goods sold for March. (Show computations)(2%) Using the weighted average method, calculate the amount assigned to the inventory on hand on March 31. (b) (). Using the LIFO assumption, calculate the amount assigned to the inventory on hand on March 31. (Show computations) (2%) (Show computations) (2%)

Answer 1

(a) Cost of goods sold for March: $13600

Perpetual Inventory - FIFO Method
	Purchases			Cost of Goods Sold			Balance in Inventory
Date	Units	Unit cost	Total $	Units	Unit cost	Total $	Units	Unit cost	Total $
3/1							100	40	4000
3/3	60	50	3000				100	40	4000
							60	50	3000
3/4				70	40	2800	30	40	1200
							60	50	3000
3/10	200	55	11000				30	40	1200
							60	50	3000
							200	55	11000
3/16				30	40	1200	10	50	500
				50	50	2500	200	55	11000
3/19				10	50	500
				50	55	2750	150	55	8250
3/25				70	55	3850	80	55	4400
3/30	40	60	2400				80	55	4400
							40	60	2400
3/31 Total	300		16400	280		13600	120		6800

(b) Inventory on hand on March 31: $6520.40

Perpetual Inventory - Weighted Average Method
	Purchases			Cost of Goods Sold			Balance in Inventory
Date	Units	Unit cost	Total $	Units	Unit cost	Total $	Units	Unit cost	Total $
3/1							100	40	4000
3/3	60	50	3000				160	43.75	7000
3/4				70	43.75	3062.50	90	43.75	3937.50
3/10	200	55	11000				290	51.51	14937.50
3/16				80	51.51	4120.80	210	51.51	10816.70
3/19				60	51.51	3090.60	150	51.51	7726.10
3/25				70	51.51	3605.70	80	51.51	4120.40
3/30	40	60	2400				120	54.34	6520.40
3/31 Total	300		16400	280		13879.60	120		6520.40

Note: In absence of specific instructions, the unit cost and total amounts have been rounded off to 2 decimal places. Kindly round off as required.

(c) Inventory on hand on March 31: $5600

Perpetual Inventory - LIFO Method
	Purchases			Cost of Goods Sold			Balance in Inventory
Date	Units	Unit cost	Total $	Units	Unit cost	Total $	Units	Unit cost	Total $
3/1							100	40	4000
3/3	60	50	3000				100	40	4000
							60	50	3000
3/4				60	50	3000
				10	40	400	90	40	3600
3/10	200	55	11000				90	40	3600
							200	55	11000
3/16				80	55	4400	90	40	3600
							120	55	6600
3/19				60	55	3300	90	40	3600
							60	55	3300
3/25				60	55	3300
				10	40	400	80	40	3200
3/30	40	60	2400				80	40	3200
							40	60	2400
3/31 Total	300		16400	280		14800	120		5600