Question

(b)(1) Determine the ending inventory and cost of goods sold under the First-in, First-out cost flow method. Prove the accuracy of the cost of goods sold. Date Reference Reference Ending Inventory Units Unit Cost Reference Reference Formula Reference Fomula Total Cost Formula Fomula Fomula Cost of Goods Sold Cost of goods available for sale Less: Title Cost of Goods Sold Reference Reference Formula Date Reference Reference Reference Reference Proofof Cost of Goods Sold Units Unit Cost Reference Reference Reference Reference Reference Reference Formula Reference Fomula Total Cost Fomula Fomula Formula Fomula Fomula (b)(2) Determine the ending inventory and cost of goods sold under the Last-in, First-out cost flow method. Prove the accuracy of the cost of goods sold. Date Reference Reference Ending Inventory Units Unit Cost Reference Reference Fomula Reference Fomula Total Cost Formula Fomula Formula Cost of Goods Sold Cost of goods available for sale Title Title Reference Reference Formula Date Reference Reference Reference Reference Proof of Cost of Goods Sold Units Unit Cost Reference Reference Reference Reference Reference Reference Quantity Reference Fomula Total Cost Fomula Fomula Fomula Fomula Fomula (b)(3) Determine the ending inventory and cost of goods sold under the Average Cost cost flow method. Total units purchased cost: Title Average unit cost Reference Reference Formula (Set to three decimal places.) Ending inventory quantity: Ending inventory value: Cost of goods sold: Cost of goods available for sale Fomula Fomula Fomula Formula 1 Which cost flow method results in the highest inventory amount for the balance sheet? Why? © 2) Which cost flow method results in the highest cost of goods sold for the income statement? Why?

Determine cost of goods sold and ending inventory using FIFO, LIFO, and average-cost with analysis.                                  
                                  
Financial Accounting, 8th Edition by Weygandt, Kieso, and Kimmel                                  
Primer on Using Microsoft Excel in Accounting by Rex A Schildhouse                                  
Problem: Doom's Day Distribution markets CDs of the performing artist Marilynn. At the beginning of October, Doom's Day                                  
had in beginning inventory           2,000    of Marilynn’s CDs with a unit cost of           $7.00    During October   
Doom's Day made the following purchases of Marilynn’s CDs.                                  
           3-Oct   3,000    units at   $8.00           
           9-Oct   5,500    units at   9.00           
           18-Oct   4,000    units at   10.00           
           25-Oct   2,000    units at   11.00           
                                  
During October       13,500    units were sold. Doom's Day uses a periodic inventory system.                      
                                  
Instructions:                                  
(a) Determine the cost of goods available for sale.                                  
                                  
       Date:   Quantity       Unit Cost:   Extended Cost:          
       3-Oct   2,000    units at   $7.00    $14,000           
       3-Oct   3,000    units at   $8.00    24,000           
       9-Oct   5,500    units at   $9.00    49,500           
       18-Oct   4,000    units at   $10.00    40,000           
       25-Oct   2,000    units at   $11.00    22,000           
       Quantity:    16,500    Cost of goods available:        $149,500           

Answer 1

Correct Answer:

periodic inventory	FIFO	LIFO	Weighted Average
Cost of Goods Sold	$               1,17,500	$               1,27,500	$                   1,22,318
Ending Inventory	$                  32,000	$                  22,000	$                       27,182

Working:

Cost of Goods Available for sale
	Units	Cost per unit	value
Beginning Inventory	2000	$                         7.0	$                   14,000.0
Purchases	3000	$                         8.0	$                   24,000.0
Purchases	5500	$                         9.0	$                 49,500.00
Purchases	4000	$                       10.0	$                   40,000.0
Purchases	2000	$                       11.0	$                   22,000.0
Total	16500		$                   1,49,500

FIFO
Total Units Available for sale			16500		$            1,49,500
Units Sold			13500
Ending Inventory Units			3000
Valuation
Cost of Goods Sold		2000		$                           7.00	$         14,000.00
		3000		$                           8.00	$               24,000
		5500		$                           9.00	$         49,500.00
		3000		$                         10.00	$         30,000.00
Cost of Goods Sold		13500	units		$            1,17,500
Ending Inventory		3000	units		$            32,000.0

	LIFO
A	Total Units Available for sale			16500		$            1,49,500
	Units Sold			13500
	Ending Inventory Units			3000
	Valuation
	Cost of Goods Sold		2000		$                         11.00	22,000.00
			4000		$                         10.00	40,000.00
			5500		$                           9.00	49,500.00
			2000.00		$                           8.00	16,000.00
B	Cost of Goods Sold		13500	units		$      1,27,500.00
A-B	Ending Inventory		3000	units		$         22,000.00

Weighted Average Cost Per unit
Units		(A)	16500
Total Cost		(B)	$         1,49,500.00
Average Cost		(C=B/A)	$                       9.06

	Weighted Average
A	Total Units Available for sale			16500		$      1,49,500.00
	Units Sold			13500
	Ending Inventory Units			3000
	Valuation
	Cost of Goods Sold		13500		$                       9.0606	$      1,22,318.18
B	Cost of Goods Sold		13500	units		$      1,22,318.18
A-B	Ending Inventory		3000	units		$         27,181.82

End of answer.

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