Question

EXERCISE & Cear Flow Assumptione Perle System (15 pts) The following inton is beter W on Com Assume that Waldron uses a periodic Inventory system and that there we 650 units on hand at the end of the month Instructions: Answer the following independent questions and show.computations supporting your answers Assume that the company uses the FIFO method. Determine the value of the ending Inventory and the cost of Goods Sold 2 Card Gards Sold Ending Inventory Units Units Date Tool Assume that the company uses the LIFO method. Determine the value of the ending inventory and the cost of Goods Sold. LIFO DEnding Inventory 2)Cost Goods Sold Dute Units Unit Cost Total Cont IL Assume that the company uses the average-Cost method. Determine the value of the ending inventory and the Cost of Goods Sold. AVERAGE-COST 2) CostdGoods Sold Ending Inventory Average cost per Cinit Unit Cost Tol Cost BlExam #2

Answer 1

Under FIFO Method:

1) Ending inventory:

Date	units	per unit ($)	total cost ($)
Jan 5	150	6	900
Jan 25	500	7	3,500
			$ 4,400

2) COGS = Total cost - Ending inventory

= 11,900 - 4,400 = $ 7,500

{(600 units × $ 5 per unit) + (750 units × $ 6 per unit)}

Under LIFO method:

1) Ending inventory:

Date	units	Per unit	total cost
Jan 1	600	5	3,000
Jan 5	50	6	300
			$ 3,300

2) COGS = 11,900 - 3,300 = $ 8,600

{(500 units × $ 7 per unit) + (850 units × $ 6 perunit)}

Under Average cost:

Average cost = Total cost / no of units

Average cost = 11,900/2000 = $ 5.95 per unit

1) Ending inventory:

Units	per unit	total cost
650	5.95	3,867.50
		$ 3,867.50

2) COGS = 11,900 - 3,867.50 = $ 8,032.50

(1350 units × $ 5.95 per unit)