Question

Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 40 units @ $102 Mar. 10 Purchase 70 units $114 30 units @ $122 Aug. 30 Dec. 12 Purchase Purchase 60 units @ $128 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 neares whole dollar. Cost of Merchandise Inventory and cost of Merchandise Sold Inventory Method Merchandise Inventory Merchandise Sold First-in, first-out (FIFO) 5 Last-in, first-out (LIFO) Weighted average cost to previous Next Check My Work 2 more Check My Work uses remaining A 4 12:53 AM 11/14/2019

Answer 1

inventory method	merchandise inventory	merchandise sold
FIFO	10,120	13,280
LIFO	8,640	14,760
weighted average cost	9,360	14,040

working:

total units available for sale = (40+70+30+60)=>200 units.

units in ending inventory = 80.

so units sold = 200 units - 80 units

=>120 units.

FIFO:

cost of goods sold = out of 120 units sold :40 units will be from beginning inventory = (40 units*$102) =>$4,080.

70 units will be from march 10 purchase => (70*114) =>$7,980.

10 units will be from Aug 30 purchase =>10 *122 =>$1,220.

total cost of goods sold = $13,280.

inventory:

80 units of inventory:

20 units will be from aug 30 purchase =>20*$122 =>$2,440.

60 units will be from dec 12 purchase.=>60*128 =>$7,680.

value of ending inventory =$10,120..

LIFO:

120 units sold:

60 will be from dec 12 =>60*128 =>7680.

30 will be from aug 30 =>30*122=>3,660.

30 will be from mar 10=>30*114=>3,420

total cost of goods sold =>$14,760.

ending inventory 80 units:

40 units will be from opening inventory =40 units*$102 =>$4,080.

40 units will be from purchase of ,march 10=>40*114=>$4,560

total ending inventory = 4080+4560=>$8,640.

weighted average:

first let us know the weighted average cost = [(40*102)+(70*114) + (30*122) +(60*128)]/(40+70+30+60)

=>$117.

cost of goods sold = $14,040.

cost of inventory = $9,360