Question

Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies Its Inventory costing method at the end of each period, as if it uses a periodic Inventory system. Assume its accounting records provided the following Information at the end of the accounting period, January 31. The Inventory's selling price is $12 per unit. Total Cost $ 760 Transactions Inventory, January 1 Sale, January 10 Purchase, January 12 Sale, January 17 Purchase, January 26 Unit Cost Units $4.00 190 (150) 4.50 240 (110) 5.50 70 1,080 385 Assume that for Specific identification method the January 10 sale was from the beginning Inventory and the January 17 sale was from the January 12 purchase. Required: 1. Compute the amount of goods available for sale, ending Inventory, and cost of goods sold at January 31 under each of the following Inventory costing methods: (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.) Amount of Goods Available Ending Inventory for Sale Cost of Goods Sold a. Weighted average cost b. First-in, first-out c. Last-in, first-out d. Specific identification

Answer 1

Answer

• Requirement 1

Methods	Amount of Goods Available for Sale	Ending Inventory	Cost of Goods Sold
Weighted average cost	$      2,225.00	$              1,068.00	$                 1,157.00
FIFO	$      2,225.00	$              1,150.00	$                 1,075.00
LIFO	$      2,225.00	$                  985.00	$                 1,240.00
Specific Identification	$      2,225.00	$              1,130.00	$                 1,095.00

• 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	190	$                   4.00	$                            760.00	190	$                 4.00	$                     760.00	0	$                   4.00	$                         -
Purchases:
12-Jan	240	$                   4.50	$                        1,080.00	70	$                 4.50	$                     315.00	170	$                   4.50	$                765.00
26-Jan	70	$                   5.50	$                            385.00	0	$                 5.50	$                              -	70	$                   5.50	$                385.00
TOTAL	500		$                        2,225.00	260		$                 1,075.00	240		$            1,150.00
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	190	$                   4.00	$                            760.00	0	$                 4.00	$                              -	190	$                   4.00	$                760.00
Purchases:
12-Jan	240	$                   4.50	$                        1,080.00	190	$                 4.50	$                     855.00	50	$                   4.50	$                225.00
26-Jan	70	$                   5.50	$                            385.00	70	$                 5.50	$                     385.00	0	$                   5.50	$                         -
TOTAL	500		$                        2,225.00	260		$                 1,240.00	240		$                985.00
Specific Identification	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	190	$                   4.00	$                            760.00	150	$                 4.00	$                     600.00	40	$                   4.00	$                160.00
Purchases:
12-Jan	240	$                   4.50	$                        1,080.00	110	$                 4.50	$                     495.00	130	$                   4.50	$                585.00
26-Jan	70	$                   5.50	$                            385.00	0	$                 5.50	$                              -	70	$                  5.50	$                385.00
TOTAL	500		$                        2,225.00	260		$                 1,095.00	240		$            1,130.00
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	190	$                   4.00	$                            760.00
Purchases:
12-Jan	240	$                   4.50	$                        1,080.00
26-Jan	70	$                   5.50	$                            385.00
TOTAL	500	$              4.4500	$                        2,225.00	260	$             4.4500	$                 1,157.00	240	$              4.4500	$            1,068.00