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These are the inventory transactions for a start up business. red Date Type Purchase Sale Purchase Sale Units 100 40 25 70 Unit Cost 50 0 01/07/17 15/07/17 31/07/17 15/08/17 60 Do not use punctuation in numerical answers. Calculate Cost of Goods Sold using periodic FIFO: Calculate Closing inventory using periodic average cost us page Ne
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Answer #1

Purchase and Sale data bifurcated:

Data: Purchases data: Units Cost 100 25 125 Amount 50 5,000 01/07/2017 Purchase 31/07/2017 Purchase 60 1,500 Total $6,500 Sales data: Units 15/07/2017 Sales 15/08/2017 Sales Total 40 70 110

Cost of goods sold under Periodic FIFO:

Calculation of Cost of Goods Sold using periodic FIFC Under the FIFO Method, we sale the oldest inventory we have in stock. it in periodic inventory system, cost of goods sold is assigned at the end of the period. So, in this case, there was a total sale of 110 units, in which we will assign cost to the sales unit, to calculate cost of goods sold as below: Cost 40 60 10 Units 01/07/2017 Purchase 01/07/2017 Purchase 31/07/2017 Purchase Total cost of goods sold Amount 50 $ 2,000 50 3,000 60 600 110 $ 5,600 Total cost of goods sold under periodic FIFO 5,600

Calculation of closing inventory using periodic average cost:

Computation of closing inventory using periodic average cost: Explanation of periodic average cost - in average cost, the cost of goods sold and ending inventory is determined by applying the average price of all the total goods in stock. It is calculated when the period is over and accordingly applied to the units sold. Average cost Total purchase cost/units sold Average cost 6,500/125 $52 Closing inventory Purchases -Units sold 125-110 15 units Closing inventory value Closing inventory* average cost 15 units $ 52 $780 Closing inventory under periodic average cost $ 780

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