Jones Co. started the year with no inventory. During the year, it purchased two identical inventory...

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Jones Co. started the year with no inventory. During the year, it purchased two identical inventory items at different times.

business accounting

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Answer 1

Answer #1

a.
In case of FIFO the inventory purchase first would be sold first and thus accordingly COGS and ending inventory would be determined
Thus, the first item would be sold and second item held in inventory

COGS	$1,230
Ending inventory	$1,460

b.
In case of LIFO method the inventory purchase latest is sold first and earlier one is held as inventory
Thus, the second item would be sold and first item held in inventory

COGS	$1,460
Ending inventory	$1,230

c.
Weighted average costs per unit	(1230+1460)/2
Weighted average costs per unit	$1,345	per unit

Costs of goods sold	$1,345	1345*1
Ending inventory	$1,345	1345*1

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Answer 2

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