Question

Problem 6-03A Sunland Company had a beginning inventory of 130 units of Product RST at a cost of $8 per unit. During the year, purchases were: Feb. 20 May 5 670 600 units at units at $9 $10 Aug. 12 Dec. 8 470 130 units at units at $11 $12 dy Sunland uses a periodic inventory system. Sales totaled 1,570 units. Determine the cost of goods available for sale. The cost of goods available for sale Calculate Average Cost. (Round answer to 3 decimal places, e.g. 5.125.) Average costs SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO Determine the ending inventory and the cost of goods sold under each of the assumed cost flow methods (FIFO, UFO, and average cost). (Round an to o decimal places, e.g. 150.)

Answer 1

Correct Answer:

Cost of Goods Available for sale	$                  19,800
Average Cost	$                       9.90

Working:

Cost of Goods Available for sale
	Units	Cost per unit	value
Beginning Inventory	130	$                         8.0	$                     1,040.0
Purchases	670	$                         9.0	$                     6,030.0
Purchases	600	$                       10.0	$                   6,000.00
Purchases	470	$                       11.0	$                     5,170.0
Purchases	130	$                       12.0	$                     1,560.0
Total	2000		$                       19,800

Weighted Average Cost Per unit
Units		(A)	2000
Total Cost		(B)	$            19,800.00
Average Cost		(C=B/A)	$                       9.90

Requirement 2:

	FIFO	LIFO	Weighted Average
Ending Inventory	$                     4,860	$                     3,740	$                         4,257
Cost of Goods Sold	$                  14,940	$                  16,060	$                       15,543

Working:

	FIFO
A	Total Units Available for sale			2000		$               19,800
	Units Sold			1570
	Ending Inventory Units			430
	Valuation
	Cost of Goods Sold		130		$                           8.00	$            1,040.00
			670		$                           9.00	$                  6,030
			600		$                         10.00	$            6,000.00
			170		$                         11.00	$            1,870.00
B	Cost of Goods Sold		1570	units		$               14,940
A-B	Ending Inventory		430	units		$              4,860.0

	LIFO
A	Total Units Available for sale			2000		$               19,800
	Units Sold			1570
	Ending Inventory Units			430
	Valuation
	Cost of Goods Sold		130		$                         12.00	1,560.00
			470		$                         11.00	5,170.00
			600		$                         10.00	6,000.00
			370.00		$                           9.00	3,330.00
B	Cost of Goods Sold		1570	units		$         16,060.00
A-B	Ending Inventory		430	units		$            3,740.00

	Weighted Average
A	Total Units Available for sale			2000		$         19,800.00
	Units Sold			1570
	Ending Inventory Units			430
	Valuation
	Cost of Goods Sold		1570		$                       9.9000	$         15,543.00
B	Cost of Goods Sold		1570	units		$         15,543.00
A-B	Ending Inventory		430	units		$            4,257.00

End of answer.

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