Question

Aircard Corporation tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period as if it uses a periodic inventory system. The following are the transactions for the month of July unit cost $45 July 1 July 5 July 13 July 17 July 25 July 27 Beginning Inventory Sold Purchased Sold Purchased Sold units 2,000 1.000 6. ee 3.000 8.00 5,000 Calculate the cost of goods available for sale, ending inventory, and cost of goods sold of Aircard uses (a) FIFO. (b) LIFO, or (c) weighted average cost. (Round "Cost per Unit" to 2 decimal places.) FIFO UFO Weighted Average Cost Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold

Answer 1

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	FIFO	LIFO	Weighted Average cost
Cost of goods available for sale	$ 7,92,000	$     7,92,000	$       7,92,000
Ending Inventory	$ 3,57,000	$     3,35,000	$       3,46,500
Cost of goods sold	$ 4,35,000	$     4,57,000	$       4,45,500
Workings:
	Cost of goods available for sale			Cost of goods sold - Periodic			Ending Inventory - Periodic
FIFO	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
Beginning Inventory	2,000	$                 45	$          90,000	2,000	$           45	$      90,000	-	$           45	$                -
Purchases:
Jul-13	6,000	$                 49	$       2,94,000	6,000	$           49	$ 2,94,000	-	$           49	$                -
Jul-25	8,000	$                 51	$       4,08,000	1,000	$           51	$      51,000	7,000	$           51	$   3,57,000
	16,000		$       7,92,000	9,000		$ 4,35,000	7,000		$   3,57,000
	Cost of goods available for sale			Cost of goods sold - Periodic			Ending Inventory - Periodic
LIFO	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
Beginning Inventory	2,000	$                 45	$          90,000	-	$           45	$               -	2,000	$           45	$       90,000
Purchases:
Jul-13	6,000	$                 49	$       2,94,000	1,000	$           49	$      49,000	5,000	$           49	$   2,45,000
Jul-25	8,000	$                 51	$       4,08,000	8,000	$           51	$ 4,08,000	-	$           51	$                -
	16,000		$       7,92,000	9,000		$ 4,57,000	7,000		$   3,35,000
	Cost of goods available for sale			Cost of goods sold - Periodic			Ending Inventory - Periodic
Weighted Average	# of units    (A)	Cost per unit	Cost of goods available for sale	# of units sold               (B)	Cost per unit	Cost of goods sold	# of units in ending inventory      (A) - (B)	Cost per unit	Ending Inventory
Beginning Inventory	2,000	$                 45	$          90,000
Purchases:
Jul-13	6,000	$                 49	$       2,94,000
Jul-25	8,000	$                 51	$       4,08,000
	16,000	$           49.50	$       7,92,000	9,000	$     49.50	$ 4,45,500	7,000	$     49.50	$   3,46,500
Weighted average rate = $792000 / 16000 = $49.50