Question

Question 2 (24 score) Consider the following information for Maynor Company, which uses a perpetual inventory system: Transaction Units Unit Cost Total Cost January March 28 August 22 October 14 Beginning Inventory10 $60 Purchase Purchase Purchase 20 20 25 75 600 1,320 1,400 1,900 $5,220 70 76 Goods Available for Sale The company sold 25 units on May 1 and 20 units on October 28. Required: Calculate the company's ending inventory and cost of goods sold using the each of following inventory costing methods. Part a. FIFO Part b. LIFO Part c. Weighted Average

Answer 1

Answer

• All working forms part of the answer
• Answers

Requirement	Ending Inventory	Cost of Goods Sold
Part ‘a’ FIFO	$ 2,250	$ 2,970
Part ‘b’ LIFO	$ 2,080	$ 3,140
Part ‘c’ Weighted Average	$ 2,172	$ 3,048

• Working:

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	10	$                60.00	$                            600.00	10	$         60.00	$              600.00	0	$        60.00	$                         -
Purchases:
28-Mar	20	$                66.00	$                        1,320.00	20	$         66.00	$           1,320.00	0	$        66.00	$                         -
22-Aug	20	$                70.00	$                        1,400.00	15	$         70.00	$           1,050.00	5	$        70.00	$                350.00
14-Oct	25	$                76.00	$                        1,900.00		$         76.00	$                        -	25	$        76.00	$            1,900.00
TOTAL	75		$                        5,220.00	45		$           2,970.00	30		$            2,250.00

Schedule of Cost of Merchandise Sold
LIFO METHOD
Date	Quantity Purchased	Purchases Unit Cost	Purchases Total Cost	Quantity Sold	Cost of Merchandise Sold Unit Cost	Cost of Merchandise Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
Jan-19							10	$       60.00	$                  600.00
Mar-28	20	$            66.00	$           1,320.00				10	$       60.00	$                  600.00
						$                     -	20	$       66.00	$               1,320.00
May-01				20	$       66.00	$          1,320.00	5	$       60.00	$                  300.00
				5	$       60.00	$             300.00			$                         -
Aug-22	20	$            70.00	$           1,400.00				5	$       60.00	$                  300.00
			$                      -				20	$       70.00	$               1,400.00
Oct-14	25	$            76.00	$           1,900.00				5	$       60.00	$                  300.00
							20	$       70.00	$               1,400.00
							25	$       76.00	$               1,900.00
Oct-28				20	$       76.00	$          1,520.00	5	$       60.00	$                 300.00
							20	$       70.00	$               1,400.00
							5	$       76.00	$                  380.00
Balance	65		$           4,620.00	45		$          3,140.00	30		$               2,080.00

Schedule of Cost of Merchandise Sold
Weighted Average
Date	Quantity Purchased	Purchases Unit Cost	Purchases Total Cost	Quantity Sold	Cost of Merchandise Sold Unit Cost	Cost of Merchandise Sold Total Cost	Inventory Quantity	Inventory Unit Cost	Inventory Total Cost
Jan-01							10	$             60.00	$          600.00
Mar-28	20	$ 66.00	$            1,320.00			$                 -	30	$             64.00	$       1,920.00
May-01			$                       -	25	$      64.00	$       1,600.00	5	$             64.00	$          320.00
Aug-22	20	$ 70.00	$            1,400.00			$                 -	25	$             68.80	$       1,720.00
Oct-14	25	$ 76.00	$            1,900.00			$                 -	50	$             72.40	$       3,620.00
Oct-28			$                       -	20	$      72.40	$       1,448.00	30	$             72.40	$       2,172.00
Dec-31	Balances		$            4,620.00	45		$       3,048.00	30		$       2,172.00