Question

Problem E

EME Assuming periodic inventory methods. Show work and circle your answers Rock Shop shows the following data related to an item of inventory Inventory, January 1 300 units @ $10.00 Purchase, January 9 700 units @ $11.00 Purchase, January 19 140 units @ $13.00 Ending Inventory, January 31 250 units OW CALCULATIONS structions What value should be assigned to the ending inventory and cost of goods (a) using FIFO? Cost of Goods Sold = Endimg inventory (b)using LIFO? Cost of Goods Sold = Ending inventor (c) using weighted average Cost of Goods Sold = Endimg inventor (d)Assuming the company keeps perpetual inventory and uses the moving average method ofment is the cost of goods sold if all 890 units were sold on January 12? Cost of Good Son= Under moving average, 2hat is the January 31 ending inventory? Ending the (e)Assuming the company keeps perpetual inventory and uses the LIFO method of inventory of goods sold if all 890 units were sold on January 12? Cost of Goods Soto Under perpetual LIFO, what is the January 31 ending inventory Ending Inventory =

Answer 1

Ans E Perpetual inventory System: In this system, the cost of sales and invenries are updated on every sales and purchase transactions. Last in, first out method (LIFO): In this method it is assumed that inventory which is purchased last will be sold first and the inventory will consist of old purchases. Purchase of Goods Cost of Good Sold Ending inventory Perpetual Cost of Goods Cost of No of Cost Per Ending LIFO No of Unit Cost Per Unit No of Unit Cost Per Unit Available for Sale Good Sold Unit 1 Unit inventory Jan'1 300 $10.00 $3,000.00 Jan'9 700 $11.00 $7,700.00 300 $10.00 $3,000.00 700 $11.00 $7,700.00 1000 $10,700.00 Jan'12 700 $11.00 $7,700.00 110 $10.00 $1,100.00 $10.00 $1,900.00 890 $9,600.00 110 $0.00 $1,100.00 Jan'19 140 $13.00 $1,820.00 110 $10.00 $1,100.00 140 $13.00 $1,820.00 250 $2,920.00 Total 840 $9,520.00 890 $9,600.00 inventory Cost $2,920.00 190 Cost of Good sold Ending Inventory on Jan 31 under LIFO $9,600.00 $2,920.00