E6A-26 Comparing ending merchandise inventory, cost of goods sold, and gross profit using the periodic inventory...

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E6A-26 Comparing ending merchandise inventory, cost of goods sold, and gross profit using the periodic inventory system-FIFO,

E6A-26 Requirements 1. Compute ending merchandise inventory, cost of goods sold, and gross profit using the FIFO inventory co

ending merchandise inventory FIFO ending merchandise inventory FIFO Cost of Goods Sold: FIFO Gross Profit

Requirement 2 Requirement 3 Using weighted-average, ending merchandise inventory is $110, cost of goods sold is $493, and gro

Weighted-average ending merchandise inventory = 6 units x $18.27 per unit = $110 Weighted-average Cost of Goods Sold: Cost of

business accounting

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Answer 1

Answer #1

Ans.	Available for sale
	Date		Units	Rate	Total
	1-Jun		17	$15.00	$255
	12-Jun		5	$19.00	$95
	24-Jun		11	$23.00	$253
	Cost of goods available for sale		33		$603

	*Calculation of sales:
	Date	Units	Rate	Cost
	20-Jun	14	$37.00	$518
	29-Jun	13	$37.00	$481
	Total sales	27		$999

Ans. 1	Periodic FIFO:

	Date	Units	Rate	Total
	1-Jun	17	$15.00	$255
	12-Jun	5	$19.00	$95
	24-Jun	5	$23.00	$115
	Cost of goods sold	27		$350

	Ending inventory = Total cost of goods available for sale - Ending inventory
	$603 - $350
	$253

	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.


	Sales	$999
	Less: cost of goods sold	$350
	Gross profit	$649

Ans. 2	Periodic LIFO:

	Date	Units	Rate	Total
	24-Jun	11	$23.00	$253
	12-Jun	5	$19.00	$95
	1-Jun	11	$15.00	$165
	Cost of goods sold	27		$348

	Ending inventory = Total cost of goods available for sale - Ending inventory
	$603 - $348
	$255

	*In LIFO method the units that have purchased last, are released the first one and ending inventory units
	remain from the first purchase.

	Sales	$999
	Less: cost of goods sold	$348
	Gross profit	$651

Ans. 3	Weighted average cost:

	Average cost per unit = Total cost of goods available for sale / Total units available
	$603 / 33
	$18.27	per unit


	Cost of goods sold = Average cost per unit * Units sold
		$18.27 * 27
		$493

	Ending inventory = Total cost of goods available for sale - cost of goods sold
	$603 - $493
	$110

	Sales	$999
	Less: cost of goods sold	$493
	Gross profit	$506

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Answer 2

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