Question

i have the correct answers circled but have no idea how to get any of them and have an exam in the morning so help would be very appreciated!!!

Use the information below for the month of October to answer the following questions beginning with 23. Ghouls Inc. buys and sells flashlights to retailers. Round your final answer to the nearest dollar (Answer choices have been rounded to the nearest dollar). Date Units Cost per Unit Oct 1 Beg Inventory 500 $1.00 Oct 11 Sale $4.00/unit 300 - Oct 22 Purchase 1,000 $1.50 Oct 27 Sale $4.20/unit 650 - 23. If Ghouls uses FIFO - perpetual what will its cost of goods sold be for the month of October? a. $1,275 b. $1,175 c. $725 d. $825 24. If Ghouls uses FIFO perpetual, what will the cost of its inventory on hand be on October 317 a. $1,275 b. $1,175 c. $725 d. $825 25. if Ghouls uses LIFO - perpetual what will its cost of goods sold be for the month of October? a. $1,275 b. $1,175 C. $725 d. $825 26. If Ghouls uses LIFO - perpetual, what will the cost of its inventory on hand be on October 31? a. $1,275 b. $1,175 C. $725 d. $825 27. If Ghouls uses weighted average - perpetual what will its cost of goods sold be for the month of October? a. $1,175 b. $1,275 $1,220 d. $1,200

Answer 1

23) Cost of Goods Sold according to FIFO method for the month of October:

In FIFO method of inventory valuation, we record the cost of oldest goods purchased first at the time of selling.

That is why in the table below first 500 units sold are recorded at $1.00 and remaining units at $1.50.

Cost of goods sold on Oct 11	300 units *$1.00	$300
Cost of goods sold on Oct 27 (500 units @$1.00 - 300 units @$1.00)	200 units*$1.00	$200
(650 units - 200 units @$1.00)	450 units*$1.50	$675
Cost of goods sold		$1,175

24) Cost of Inventory in Hand according to FIFO method at October 31:

Inventory at end (1,000 units - 450 units)

550 units @$1.50

$825

Goods Sold include 500 units @$1.00 purchased on Oct 1 and remaining 450 units@$1.50 purchased on Oct 22. The inventory left in hand is (1,000 units - 450 units) 550 units @$1.50.

25) Cost of Goods Sold according to LIFO method for the month of October:

In LIFO method of inventory valuation, we record the cost of new goods purchased first at the time of selling.

Cost of goods sold on Oct 11	300 units *$1.00	$300
Cost of goods sold on Oct 27	650 units*$1.50	$975
Cost of goods sold		$1,275

In the table above, we sold the 300 units on Oct 11 from the Inventory of 500 units @$1.00 and the goods sold on Oct 27 are sold from Inventory purchased the most recently i.e. on Oct 22. That is why we recorded the units @$1.50.

26) Cost of Inventory in Hand according to LIFO method at October 31:

The inventory in hand according to LIFO method is 200 units from the Oct 1 purchase (500 units - 300 units). And 350 units from Oct 22 purchase (1,000 units - 650 units).

Inventory in hand on Oct 31
200 units @$1.00	$200
350 units @$1.50	$525
Total Cost of Inventory in hand on Oct 31	$725

27) Cost of Goods Sold according to Weighted Average Method:

In Weighted Average method of Inventory valuation we calculate the weighted average selling price. It is calculated by dividing the Total Cost of Inventory by Total Units.

Cost of Goods Sold on Oct 11	300 units @$1.00	$300
Cost of Goods Sold on Oct 27	650 @$1.42	$923
[Weighted Cost per unit :(200 units @ 1.00 +1,000 units @$1.50)/1,200 units] = $1.42 per unit		$1,223

The answer will be rounded off to $1,220.