Question

Ferris Company began 2016 with 9,000 units of its principal product. The cost of each unit is $8. Merchandise transactions for the month of January 2016 are as follows:

	Purchases
Date of Purchase	Units			Unit Cost*			Total Cost
Jan. 10		6,000		$	9		$	54,000
Jan. 18		9,000			10			90,000
Totals		15,000					$	144,000

*Includes purchase price and cost of freight.

Sales
Date of Sale	Units
Jan. 5		5,000
Jan. 12		3,000
Jan. 20		6,000
Total		14,000

10,000 units were on hand at the end of the month.

Required:

Calculate January's ending inventory and cost of goods sold for the month using each of the following alternatives:

Cost of Goods Sold - Periodic Cost of Goods Available for Sale Ending Inventory - Periodic FIIFO FIFO Cost of # of units in ending inventory FIFO #of Cost of Cost per Cost per unit Cost per Ending Inventory #of units Goods Goods units unit Available unit sold Sold for Sale Beginning Inventory $ 8.00 S 72,000 $ 9,000 72,000 9,000 8.00 8.00 0 Purchases: $ January 10 6,000 9.00 54,000 5,000 45,000 1,000 9.00 9.00 9,000 9,000 $ 90,000 January 18 9,000 10.00 0 10.00 0 10.00 90,000 24,000 $ 99,000 Total $ 216,000 $ 117,000 14,000 10,000 Cost of Goods Sold - Periodic Cost of Goods Available for Sale Ending Inventory - Periodic LIFO LIFO Cost of LIFO Cost of #of # of units Cost per # of units Cost per unit Cost per unit Ending Inventory Goods in ending inventory units sold Goods unit Available Sold for Sale 8.00 S $ 72,000 Beginning Inventory 9,000 9,000 72,000 0 8.00 8.00 Purchases: $ 54,000 January 10 9.00 5,000 6,000 9.00 45,000 1,000 9.00 9,000 9,000 $ 0 $ January 18 10.00 90,000 9,000 10.00 90,000 10.00 0 $216,000 $ 81,000 Total $ 135,000 24,000 14,000 10,000

Answer 1

ANSWER = 1
FIFO METHOD - PERPETUAL METHOD
		PURHASES			COST OF GOODS SOLD			ENDING INVENTORY
Date	Particulars	Units	Rate	Total	Units	Rate	Total	Units	Rate	Total
Jan, 01	Beginning inventory	9000	$                8.00	$72,000	9000	$               8.00	$72,000	0	0	$0
Jan, 10	Purchases	6000	$                9.00	$54,000	5000	$               9.00	$45,000	1000	$           9.00	$9,000
Jan, 18	Purhcases	9000	$             10.00	$90,000	0	$                    -	$0	9000	$         10.00	$90,000
		24,000		$2,16,000	14,000		$1,17,000	10,000		$99,000
ANSWER = 2
LIFO METHOD - PERPETUAL METHOD
		PURHASES			COST OF GOODS SOLD			ENDING INVENTORY
Date	Particulars	Units	Rate	Total	Units	Rate	Total	Units	Rate	Total
Jan, 01	Beginning inventory	9000	$                8.00	$72,000	5000	$               8.00	$40,000	4000	$           8.00	$32,000
Jan, 10	Purchases	6000	$                9.00	$54,000	3000	$               9.00	$27,000	3000	$           9.00	$27,000
Jan, 18	Purhcases	9000	$             10.00	$90,000	6000	$             10.00	$60,000	3000	$         10.00	$30,000
		24,000		$2,16,000	14,000		$1,27,000	10,000		$89,000
ANSWER = 3
AVERAGE METHOD - PERPETUAL METHOD
		INVENTORY ON HAND			COST OF GOODS SOLD
Date	Particulars	Units	Rate	Total	Units	Rate	Total
Jan, 01	Beginning inventory	9000	$           8.0000	$72,000
Jan, 05	Sales	-5000	$           8.0000	-$40,000	5000	$          8.0000	$40,000
	Sub-Total Average Cost	4000	$           8.0000	$32,000
Jan, 10	Purchases	6000	$           9.0000	$54,000
	Sub-Total Average Cost	10000	$           8.6000	$86,000
Jan, 12	Sales	-3000	$           8.6000	-$25,800	3000	$          8.6000	$25,800
	Sub-Total Average Cost	7000	$           8.6000	$60,200
Jan, 18	Purhcases	9000	$         10.0000	$90,000
	Sub-Total Average Cost	16000	$           9.3875	$1,50,200
Jan, 20	Sales	-6000	$           9.3875	-$56,325	6000	$          9.3875	$56,325
	Total	10,000		$93,875	14,000		$1,22,125