Question

Current Attempt in Progress Crane Company had a beginning inventory of 100 units of Product RST at a cost of $7 per unit. During the year, purchases were: Feb. 20 May 600 units at $8 525 units at $9 Aug. 12 425 units at $10 Dec.8 100 units at $11 Crane uses a periodic inventory system. Sales totaled 1,500 units. Determine the cost of goods available for sale The cost of goods available for sale $ 16175 Calculate Average Cost. (Round answer to 3 decimal places, e3 5.125) Average cost $ e Textbook and Media List of Accounts Determine the ending inventory and the cost of goods sold under each of the med.cost e

Answer 1

Statement showing Cost of Goods Date Units Rate Product Opening 100 $ 7 $ 700 20-Feb 600 $ 8 $ 4,800 05-May 525 $ 9 $ 4,725 12-Aug 425 $ 10 $ 4,250 08-Dec 100 $ 11 $ 1,100 $ 15,575 1750 Cost of Goods available for sale: $ 15,575 Average Cost = Total Cost of goods / Total units $15,575 / 1750 units $ 8.90 per unit Computation of Inventory - FIFO basis As 1750 units were produced and 1500 were sold Closing Inventory = 250 units As per FIFO, Stock purchased first will be sold first thus, closing stock will comprise of goods purchase in last i.e, | Date of Purchase Units Rate | Product 08-Dec 100 $ 11 $ 1,100 12-Aug 150 $ 10 $ 1,500 Ending Inventory $ 2,600 Cost of goods sold = Total Cost - Ending Inventory = $15,575 - $2,600 $ 12,975

Computation of Inventory - LIFO basis As 1750 units were produced and 1500 were sold Closing Inventory = 250 units As per LIFO, Stock purchased first will be sold last thus, closing stock will comprise of goods purchased at begining i.e, | Date of Purchase | Units Rate | Product Opening 100 $ 7 $ 700 20-Feb 150 $ 8 $ 1,200 Ending Inventory $ 1,900 Cost of goods sold = Total Cost - Ending Inventory = $15,575 - $1900 $ 13,675 Computation of Inventory - Average cost basis As 1750 units were produced and 1500 were sold Closing Inventory = 250 units Ending Inventory = 250 units x $8.90 $ 2,225.00 1500 units x $8.90 $ 13,350.00 Cost of Goods sold = The Ending Inventory The cost of Goods sold | $ $ FIFO LIFO Average Cost 2,600 $ 1,900 $ 2,225 12,975 $ 13,675 $ 13,350

In case of any doubts or Issues, Please comment below