Question

#1 On August 1st, the local Apple Store had a beginning inventory of 40 iPad Pros which it purchased for S500 each. On August 10th, the store purchases 20 more iPad Pros for $550 each. None were sold that week. On August 15th, the store purchases 30 more iPad Pros for $600 each. • Between August 16th and 31st, the Apple Store sells 70 of the iPad Pros. a.) Calculate the Apple Store's Ending Inventory Balance (in dollars) at the end of August and Cost of Goods Sold through August using the FIFO Method. (show all work.) b.) Calculate the Apple Store's Ending Inventory Balance (in dollars) at the end of August and Cost of Goods Sold through August using the LIFO Method. (show all work.) c.) Calculate the Apple Store's Ending Inventory Balance in dollars) at the end of August and Cost of Goods Sold through August using the Weighted Average Method. (show all work.)

Answer 1

Requirement (a) - Determination of Ending Inventory using FIFO Method: Under FIFO, the Inventory which is purchased first, will be sold and the balance will be in Inventory. Purchases Cost of goods sold Inventory on Hand Date Unit Total Unit Total Unit Total Quantity Quantity Quantity Cost Cost Cost Cost Cost Cost August 1 40 $ 500 $ 20,000 40 $ 500 $ 20,000 August 10 20 $ 550 $ 11,000 500 $ 550 $ 20,000 11,000 August 15 30 $ 600 $ 18,000 500 $ 550 $ 600 $ 20,000 11,000 18,000 Aug. 16-31 $ 600 $ 12,000 500 550 $ $ 20 $ 20,000 11,000 6,000 600 $ 90 | $ 49,000 | 70 | $ 37,000 20 $ 12,000

Requirement (b) - Determination of Ending Inventory using LIFO Method: Under LIFO, the Inventory which is purchased last, will be sold and the purchases which are made first will be in Inventory. Purchases Cost of goods sold Inventory on Hand Date Unit Total Unit Total Total Quantity Cost | Quantity Cost Quantity Cost Cost Cost Cost August 1 40 $ 500 $ 20,000 500 $ 20,000 Unit जी August 10 20 $ 550 $ 11,000 जी 500 $ 550 $ 20,000 11,000 August 15 30 $ 600 $ 18,000 जी 500 $ 550 $ 600 $ 20,000 11,000 18,000 Aug. 16-31 जी 30 20 $ $ 600 550 $ $ 500 $ 10,000 18,000 11,000 10,000 500 $ 10 90 $ 49,000 70 $ 39,000 20 $ 10,000

जी Requirement (C) - Determination of Ending Inventory using Weighted average Method: Under Weighted-Average Method, the Cost of goods sold is calculated using the Average Cost determined by dividing the Total Cost with Total Units. Purchases Cost of goods sold Inventory on Hand Date Unit Total Total Quantity Unit Quantity Total Unit Cost Quantity Cost Cost Cost Cost Cost August 1 40 $ 500 $ 20,000 500 $ 20,000 August 10 550 $ 11,000 500 $ 20,000 20 $ 550 $ 11,000 517 $ 31,000 August 15 30 $ 600 $ 18,000 40 $ 500 $ 20,000 550 $ 11,000 600 $ 18,000 544 $ 49,000 Aug. 16-31 70 $ 544 $ 38,111 544 $ 10,889 जी जी जी 20 $ $ 90 $ 49,000 70 $ 38,111 20 $ 10,889