Question

In its first month of operations, Literacy for the literate opened a new bookstore and bought merchandise in the following order: (1) 150 units at $7 on January 1, (2) 590 units at $8 on January 8, and (3) 890 units at $10 on January 29. Assume 1,110 units are on hand at the end of the month, calculate the cost of goods available for sale, ending inventory, and cost of goods sold under the (a) FIFO, (b) LIFO, and (C) weighted average cost flow assumptions. Assume a periodic inventory system is used. (Round "Cost per Unit" to 2 decimal places.) FIFO Weighted Average Cost Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold

Answer 1

As per below calculation we can see answer is different method as FIFO method, LIFO method and Average method because of as per FIFO method inventory to issued from first purchase whereas per LIFO method goods sales from last purchase per weighted average method material issued to production at Average cost of goods available.

	FIFO	LIFO	Weighted average
Cost of Goods for sale	$ 14,670	$ 14,670	$ 14,670
Ending Inventory	( $ 1,100 )	( $ 770 )	( $ 990 )
Cost of Goods Sold	$ 13,570	$ 13,900	$ 13,680

Number of units Sold

Total units available	1,630 units
Ending inventory	( 110 units)
No. of units sold	1,520 units

FIFO ( Periodic method )
Transaction	Units	Cost per unit	Total
Purchase
January,1	150	$ 7	$ 1,050
January,8	590	$ 8	$ 4,720
January,29	890	$ 10	$ 8,900
Goods available for Sales	1,630		$ 14,670
Cost of Goods Sold
From Purchase January,1	150	$ 7	$ 1,050
From Purchase January,8	590	$ 8	$ 4,720
From Purchase January,29	780	$ 10	$ 7,800
Total cost of Goods Sold	1,520		$ 13,570
Ending Inventory
From Purchase January,29 ( 890 -780 )	110	$ 10	$ 1,100
Total Ending Inventory	110	$ 10	$ 1,100

LIFO ( Periodic method )
Transaction	Units	Cost per unit	Total
Purchase :
January,1	150	$ 7	$ 1,050
January,8	590	$ 8	$ 4,720
January,29	890	$ 10	$ 8,900
Goods available for Sales	1,630		$ 14,670
Cost of Goods Sold
From Purchase January,29	890	$ 10	$ 8,900
From Purchase January,8	590	$ 8	$ 4,720
From Purchase January,1	40	$ 7	$ 280
Total cost of Goods Sold	1,520		$ 13,900
Ending Inventory :
From Purchase January,1 ( 150 -40 )	110	$ 7	$ 770
Total Ending Inventory	110	$ 7	$ 770

Weighted Average Cost ( Periodic method )
Transaction	Units	Cost per unit	Total
Purchase :
January,1	150	$ 7	$ 1,050
January,8	590	$ 8	$ 4,720
January,29	890	$ 10	$ 8,900
Goods available for Sales	1,630		$ 14,670
Cost of Goods Sold	1,520	$ 9	$ 13,680
Ending Inventory ( @ average cost )	110	$ 9	$ 990

       As per weighted average method goods to sold average cost of total

       inventory available for sales as a following solution.

Weighted average Cost per unit               = Total Cost of Goods available / No. Of units for sales               = $ 14,670 / 1,630 units               = $ 9 per units