Question

Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an item available for sale during the year were as folows Jan. 1 Inventory 50 units $92 Mar. 10 Purchase 50 units $100 Aug. 30 Purchase 30 units@ $104 Dec. 12 Purchase 70 units $108 There are 80 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 10,680 X First-in, first-out (FIFO) 9,600 X Last-in, first-out (LIFO) Weighted average cost Feedback Check My Work inventory costs for the period are calculated by taking the number of items remaining in the physical inventory times the most recent purchase price. 1f the number of items in last purchase layer is less than the number in ending inventory, the balance of the ending inventory items must be recorded at the second most recent Note that this exercise uses the periodic inventory system. FIFO means that the first units purchased are assumed to be the first to be sold. Therefore, ending purchase cost. The cost of merchandise sold for the period can be calculated by subtracting the ending inventory from the total cost of goods available for sale. le nraater han the e in eh Note that this exercise uses the periodic inventory system. LIFO means the last units purchased are assumed to be the first to be sold. Therefore the ending inventory Next Previous frr the nerind le mmade un mf the esreet enete fenm the narind the haninnine inuantonch the umbar ofunie in the andinn muen 2 more Check My Work uses remaining Check My Work Submit Assignment for Grading Save and Exit All work saved

Answer 1

Answers

Methods	Merchandise Inventory	Merchandise Sold
FIFO	$                    8,600	$                     11,680
LIFO	$                    7,600	$                     12,680
Weighted average cost	$                    8,112	$                     12,168

• Workings

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	50	$                92.00	$                        4,600.00	50	$               92.00	$                 4,600.00	0	$                 92.00	$                         -
Purchases:
10-Mar	50	$              100.00	$                        5,000.00	50	$             100.00	$                 5,000.00	0	$              100.00	$                         -
30-Aug	30	$              104.00	$                        3,120.00	20	$             104.00	$                 2,080.00	10	$              104.00	$            1,040.00
12-Dec	70	$              108.00	$                        7,560.00	0	$             108.00	$                              -	70	$              108.00	$            7,560.00
TOTAL	200		$                      20,280.00	120		$               11,680.00	80		$            8,600.00
LIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	50	$                92.00	$                        4,600.00	0	$               92.00	$                              -	50	$                 92.00	$            4,600.00
Purchases:
10-Mar	50	$              100.00	$                        5,000.00	20	$             100.00	$                 2,000.00	30	$              100.00	$            3,000.00
30-Aug	30	$              104.00	$                        3,120.00	30	$             104.00	$                 3,120.00	0	$              104.00	$                         -
12-Dec	70	$              108.00	$                        7,560.00	70	$             108.00	$                 7,560.00	0	$              108.00	$                         -
TOTAL	200		$                      20,280.00	120		$               12,680.00	80		$            7,600.00
Average Method	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	50	$                92.00	$                        4,600.00
Purchases:
10-Mar	50	$              100.00	$                        5,000.00
30-Aug	30	$              104.00	$                        3,120.00
12-Dec	70	$              108.00	$                        7,560.00
TOTAL	200	$            101.400	$                      20,280.00	120	$        101.4000	$               12,168.00	80	$          101.4000	$            8,112.00