Question

Periodic Inventory by Three Methods; Cost of Merchandise Sold

The units of an item available for sale during the year were as follows:

Jan. 1	Inventory	40 units @ $130
Mar. 10	Purchase	70 units @ $140
Aug. 30	Purchase	20 units @ $144
Dec. 12	Purchase	70 units @ $148

There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.

Cost of Merchandise Inventory and Cost of Merchandise Sold
Inventory Method	Merchandise Inventory	Merchandise Sold
First-in, first-out (FIFO)	$	$
Last-in, first-out (LIFO)
Weighted average cost

Answer 1

Periodic Method Inventory Perticulars Opening Purchase Purchase Purchase Total Purchase Units Price Cost 40 130 5200 70 140 9800 201144 2880 70 148 10360 200 28240 с A Weighted average method Weighted Avg cost = ( 28240 / 200 ) = 141.20 Closing inventory = 80* 141.20 = $ 11296 Cost of Goods sold = $ 28240 - $ 11296 = $ 16944 FIFO Method Closing inventory = (70 * 148 ) + ( 10 * 144 ) = $ 11800 Cost of Goods sold = $ 28240 - $ 11800 = $ 16440 LIFO Method Closing inventory = ( 40 * 130 ) + ( 40 * 140 ) = $ 10800 Cost of Goods sold = $ 28240 - $ 10800 = $ 17440