Question

KOBLEME me Rocks EME Assuming periodic inventory methods. Show work and circle your answers. arck Shop shows the following data related to an item of inventory Inventory, January 1 300 units @ $10.00 Purchase, January 9 700 units $11.00 Purchase, January 19 140 units @ $13.00 Ending Inventory, January 31 250 units SHOW CALCULATIONS Instructions What value should be assigned to the ending inventory and cost of goods sold (a) using FIFO? Cost of Goods Sold = Ending Inventory (b) using LIFO? Cost of Goods Sold Ending Inventory = (C) using weighted average Cost of Goods Sold = Ending Inventory = (d)Assuming the company keeps perpetual inventory and uses the moving average method of inventory costing, what is the cost of goods sold if all 890 units were sold on January 12? Cost of Goods Sold Ending Inventory = Under moving average, 2hat is the January 31 ending inventory? (e)Assuming the company keeps perpetual inventory and uses the LIFO method of inventory costing, what is the cost of goods sold if all 890 units were sold on January 12? Cost of Goods Sold = Under perpetual LIFO, what is the January 31 ending inventory Ending Inventory =

Answer 1

Available for sale Ans. Total Date Units Rate $10.00 $3,000 $7,700 $1,820 300 1-Jan $11.00 9-Jan 700 $13.00 140 19-Jan $12,520 Cost of goods available for sale 1140 Ending inventory units 250 units Units available for sale Units in ending inventory Units sold 1140 250 890 units Periodic FIFO: Ans. A Total Date Units Rate $3,000 $6,490 $10.00 300 1-Jan $11.00 9-Jan 590 $9,490 Cost of goods sold 890

*In FIFO method the units that have purchased first, are released the first one and the ending inventory units remain from the last purchases. Ending inventory Total cost of goods available for sale Cost of goods sold $12,520 $9,490 $3,030 Periodic LIFO: Ans. B Units Total Date Rate $13.00 $1,820 $7,700 19-Jan 140 $11.00 9-Jan 700 $10.00 $500 1-Jan 50 $10,020 Cost of goods sold 890 *In LIFO method the units that have purchased last, are released the first one and ending inventory units remain from the first purchase. Ending inventory Total cost of goods available for sale Cost of goods sold $12,520 - $10,020 $2,500

Periodic Weighted Average: Ans, C Average cost per unit Total cost of goods available for sale/Total units available $12,520 1140 $10.9825 per unit Cost of goods sold No. of units sold Average cost per unit 890 $10.9825 $9,774 (rounded off) Ending inventory Total cost of goods available for sale Cost of goods sold $12,520 $9,774 $2,746 Purchase Moving average Cost of goods sold Balance Ans. D Total cost Total cost Total cost Rate Date Quantity Quantity Rate Quantity Rate $10.00 $3,000 $7,700 $10.00 $3,000 $10,700 $1,177 $2,997 1-Jan 300 300 $11.00 1000 $10.70 9-Jan 700 $10.70 $9,523 $10.70 12-Jan 890 110 $13.00 $1,820 $11.99 19-Jan 140 250 $9,523 $2,997 Total Cost of goods sold Ending inventory

*Weighted average rate is calculated by using the formula of (Total available balance /Total units available). Balance Purchase Cost of goods sold Ans, E LIFO: Total cost Total cost Total cost Date Quantity Rate Quantity Rate Quantity Rate $10.00 $3,000 $7,700 $10.00 $3,000 $3,000 $7,700 1-Jan 300 300 $11.00 $10.00 9-Jan 700 300 $11.00 700 $11.00 $7,700 $1,900 12-Jan 700 $10.00 $10.00 $1,100 190 110 $13.00 $1,820 $10.00 $1,100 19-Jan 140 110 $13.00 $1,820 140 $9,600 $2,920 Total Cost of goods sold Ending inventory In LIFO method the units that have purchased last, are released the first one and the ending inventory units remain from the first purchases.