Question

RonRon ​Company's inventory records for its retail division show the following at July ​31:

At July ​31, 11 of these units are on hand.

Ron Company's inventory records for its retail division show the following at July 31: E (Click the icon to view the accounting records.) At July 31, 11 of these units are on hand. Read the requirements. Requirement 1. Compute cost of goods sold and ending inventory, using each of the following four inventory methods: Begin by entering the number of units sold and number of units in ending inventory. Then calculate cost of goods sold and ending inventory using (a) specific identification, then (b) average cost, then (c) FIFO, and finally (d) LIFO. (Round the average cost per unit to the nearest cent. Round all final answers to the nearest whole dollar.) Number O Requirements O Data Table of units Cost of goods sold 1. Compute cost of goods sold and ending inventory, using each of the following methods: Ending inventory Jul 1 Beginning inventory.... 8 units @ $ 170 = $ 1,360 a. Specific identification, with seven $170 units and four $180 units still on 5 units @ 171 = $ 15 Purchase. 855 hand at the end 180 = $ 2,160 26 Purchase 12 units @ b. Average cost c. FIFO d. LIFO ......... Print Done 2. Which method produces the highest cost of goods sold? Which method produces the lowest cost of goods sold? What causes the difference in cost of goods sold? Enter any number in the edit fields an parts remaining 7 Check Answer Print Done

Answer 1

RonRon Company FIFO Periodic Closing Stock Date Units Jul-26 11 Unit Cost Total Cost 180 1980 Cost of goods sold Date Units Unit Cost Total Cost Jul-01 170 1360 Jul-15 5 171 855 Jul-26 12180 2160 4375 Closing Stk - 11 -1980 COGS 2395 Lowest COGS 25 LIFO Periodic Closing Stock Date Units Jul-018 Jul-15 3 11 Unit Cost Total Cost 170 1360 171 513 1873 Cost of goods sold Date Units Jul-01 Jul-15 5 Jul-26 12 25 Closing Stk - 11 COGS 14 Unit Cost Total Cost 170 1360 171 855 180 2160 4375 -1873 2502 Hightest COGS

Average Cost Closing Stock Date Units Jul-26 11 Unit Cost Total Cost 175 1925 Cost of goods sold Date Units Jul-01 Jul-15 5 Jul-26 12 Unit Cost Total Cost 170 1360 171 855 180 2160 175 4375 -1925 2450 -11 Closing Stk COGS Specific Identification Closing Stock Date Units Jul-01 7 Jul-26 4 170 Unit Cost Total Cost 1190 180 720 1910 11 Cost of goods sold Date Units Jul-018 Jul-15 5 Jul-26 12 Unit Cost Total Cost 170 1360 171 855 180 2160 4375 -1910 2465 Closing Stk COGS - 11 14 The unit cost causes the difference in cost of goods sold. Since it is in increasing trend FIFO will show high Ending inventory with low COGS and vice versa for LIFO