Question

Please answer the following question TOTAL 5

Problem 8-5 Various inventory costing methods [LO8-1, 8-4] Ferris Company began 2018 with 9,000 units of its principal product. The cost of each unit is $8. Merchandise transactions for the month of January 2018 are as follows: Units Purchases Date of Purchase Unit Cost Jan. 10 6,000 $ 9 Jan. 18 9.000 Totals 15,000 *Includes purchase price and cost of freight. 10 Total Cost $ 54,000 90,000 144,000 Sales Date of Sale Jan. 5 Jan. 12 Jan. 20 Total Units 5,000 3,000 6,000 14,000 10,000 units were on hand at the end of the month. Required: Calculate January's ending inventory and cost of goods sold for the month using each of the following alternatives: 1. FIFO, periodic system. 2. LIFO, periodic system. 3. LIFO, perpetual system. 4. Average cost, periodic system. 5. Average cost, perpetual system. Complete this question by entering your answers in the tabs below. Required 1 Required 2 | Required 3 Required 4 Required 5 Calculate January's ending inventory and cost of goods sold for the month using FIFO, periodic system. Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Ending Inventory - Periodic FIFO FIFO # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory | $ $ 0.00 $ $ 0.00 $ Beginning Inventory Purchases: January 10 January 18 Total 0 0 $ 0.00 $ 0. 000 $ 0.00 $ 0. 000 $ 0 Required 1 Required 2 >

Answer 1

Ans. 1	Total units sold =   14,000
	FIFO:	Cost of goods available for sale			Cost of goods sold - Periodic FIFO			Ending inventory - Periodic FIFO
		Units	Rate	Total	Units	Rate	Total	Units	Rate	Total
	Beginning inventory	9000	$8.00	$72,000	9000	$8.00	$72,000	0	$8.00	$0
	Purchases:
	10-Jan	6000	$9.00	$54,000	5000	$9.00	$45,000	1000	$9.00	$9,000
	18-Jan	9000	$10.00	$90,000	0	$10.00		9000	$10.00	$90,000
	Total	24000		$216,000	14000		$117,000	10000		$99,000
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory units remain from the last purchases.
Ans. 2	LIFO:	Cost of goods available for sale			Cost of goods sold - Periodic LIFO			Ending inventory - Periodic LIFO
		Units	Rate	Total	Units	Rate	Total	Units	Rate	Total
	Beginning inventory	9000	$8.00	$72,000	0	$8.00	$0	9000	$8.00	$72,000
	Purchases:
	10-Jan	6000	$9.00	$54,000	5000	$9.00	$45,000	1000	$9.00	$9,000
	18-Jan	9000	$10.00	$90,000	9000	$10.00	$90,000	0	$10.00	$0
	Total	24000		$216,000	14000		$135,000	10000		$81,000
	*In LIFO method the units that have purchased last, are released the first one and ending inventory units remains from the first purchases.
Ans. 3	LIFO Perpetual:	Purchase			Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	1-Jan	9000	$8.00	$72,000				9000	$8.00	$72,000
	5-Jan				5000	$8.00	$40,000	4000	$8.00	$32,000
	10-Jan	6000	$9.00	$54,000				4000	$8.00	$32,000
								6000	$9.00	$54,000
	12-Jan				3000	$9.00	$27,000	4000	$8.00	$32,000
								3000	$9.00	$27,000
	18-Jan	9000	$10.00	$90,000				4000	$8.00	$32,000
								3000	$9.00	$27,000
								9000	$10.00	$90,000
	20-Jan				6000	$10.00	$60,000	4000	$8.00	$32,000
								3000	$9.00	$27,000
								3000	$10.00	$30,000
	Total				Cost of goods sold		$127,000	Cost of Ending inventory		$89,000
Ans. 4	Average cost:	Cost of goods available for sale			Cost of goods sold - Periodic Average cost			Ending inventory - Periodic Average cost
		Units	Rate	Total	Units	Rate	Total	Units	Rate	Total
	Beginning inventory	9000	$8.00	$72,000
	Purchases:
	10-Jan	6000	$9.00	$54,000
	18-Jan	9000	$10.00	$90,000
	Total	24000		$216,000	14000	$9.00	$126,000	10000	$9.00	$90,000
	Average cost per unit =   Total cost of goods available for sale / Units available for sale
	$216,000 / 24,000
	$9.00	per unit
Ans. 5	Weighted Average (Perpetual)
	Purchase				Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	1-Jan	9000	$8.00	$72,000				9000	$8.00	$72,000
	5-Jan				5000	$8.00	$40,000	4000	$8.00	$32,000
	10-Jan	6000	$9.00	$54,000				10000	$8.60	$86,000
	12-Jan				3000	$8.60	$25,800	7000	$8.60	$60,200
	18-Jan	9000	$10.00	$90,000				16000	$9.39	$150,200
	20-Jan				6000	$9.39	$56,340	10000	$9.39	$93,860
	Total				Cost of goods sold		$122,140	Cost of Ending inventory		$93,860
	*Weighted average rate is calculated by using the formula of (Total available balance / Total units available).