Question

Samuelson and Messenger (SAM) began 2021 with 220 units of its one product. These units were purchased near the end of 2020 for $22 each. During the month of January, 110 units were purchased on January 8 for $25 each and another 220 units were purchased on January 19 for $27 each. Sales of 130 units and 120 units were made on January 10 and January 25, respectively. There were 300 units on hand at the end of the month. SAM uses a periodic inventory system.

Required:
1. Calculate ending inventory and cost of goods sold for January using FIFO.
2. Calculate ending inventory and cost of goods sold for January using average cost.

Calculate ending inventory and cost of goods sold for January using FIFO.

FIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Ending Inventory - Periodic FIFO # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory Beginning Inventory $0 0.00 $0 $0.00 $0 Purchases: January 8 0 0.00 0 0.00 0 January 19 0 0.00 0 0.00 0 Total 0 $0 0 $0 0 $0 Average Cost Cost of Goods Available for Sale Cost of Goods Sold - Average Cost Ending Inventory - Average Cost # of units Unit Cost Cost of Goods Available for Sale # of units sold Average Cost per Unit Cost of Goods Sold # of units in ending inventory Average Cost per unit Ending Inventory Beginning Inventory $0 Purchases: January 8 0 January 19 0 Total 0 $0 $0 $0

Answer 1

Cost of Goods Sold Periodic FIFO Cost of Goods Available for Sale Ending Inventory - Periodic FIFO Cost of FIFO # of units Cost of Goods Cost per Goods unit #of units Cost per unit Cost per Ending Inventory in ending # of units unit Available sold for Sale inventory Sold Beginning Inventory Purchases: $ 4,840 $ 22 220 22 $4,840 220 $ 750 $ 25 $ 25 Jan-08 $2,750 $ 25 110 30 80 $2,000 $ 5,940 $ 27 $ 5,940 Jan-19 $27 220 0 220 Total 550 $13,530 250 $5,590 300 $7,940 Cost of Goods Sold Average Ending Inventory - Average cost Cost of Goods Available for Sale cost Cost of # of units Cost of Goods Sold Average cost Cost per Goods unit #of units Cost per Cost per Ending Inventory in ending # of units Available sold for Sale unit unit inventory Beginning Inventory Purchases: $ 4,840 $ 22 220 $ 25 $ 2,750 Jan-08 110 Jan-19 220 27 $5,940 $ 24.60 $ 24.60 550 13,530 Total 250 $6,150 300 $7,380 Note: Averge cost per unit $13,530/550 units=24.60