Question

p les and sales for saly product. Units Acquired at Cost SIO = 52.000 Units Soldat Retail y 190510 330 ml $15- 5.250 Date Activities Tan Bening m Ton 10 Sales Mar 14 Purchase Mar. 13 Sales July 30 Purchase Oct Sales Oct 26 Purchase Tetails 300 S40 150 un 50 000 430 units 540 100 mit 1.100 units 535 2.500 $18,750 RB Required He FIR r ses appellimestory system. Deine the costs a nd to ending iwwentory and to cost of L ITO. Compute the gross for each method (Round s to cents 1 Check Ending wory LG 3430 FIFO Date Goods Purchased CGS Inventory Balance (EI) FIFO Gross Margin (Gross Profit) Sales -CGS GM or GP

Answer 1

Ans. 1	FIFO:	Purchase			Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	01-Jan	200	$10.00	$2,000				200	$10.00	$2,000
	10-Jan				150	$10.00	$1,500	50	$10.00	$500
	14-Mar	350	$15.00	$5,250				50	$10.00	$500
								350	$15.00	$5,250
	15-Mar				50	$10.00	$500
					250	$15.00	$3,750	100	$15.00	$1,500
	30-Jul	450	$20.00	$9,000				100	$15.00	$1,500
								450	$20.00	$9,000
	05-Oct				100	$15.00	$1,500
					330	$20.00	$6,600	120	$20.00	$2,400
	26-Oct	100	$25.00	$2,500				120	$20.00	$2,400
								100	$25.00	$2,500
	Total				Cost of goods sold		$13,850	Ending inventory		$4,900
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.
Ans. 2	LIFO:	Goods Purchased			Cost of goods sold			Inventory Balance (EI)
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	01-Jan	200	$10.00	$2,000				200	$10.00	$2,000
	10-Jan				150	$10.00	$1,500	50	$10.00	$500
	14-Mar	350	$15.00	$5,250				50	$10.00	$500
								350	$15.00	$5,250
	15-Mar				300	$15.00	$4,500	50	$10.00	$500
								50	$15.00	$750
	30-Jul	450	$20.00	$9,000				50	$10.00	$500
								50	$15.00	$750
								450	$20.00	$9,000
	05-Oct				430	$20.00	$8,600	50	$10.00	$500
								50	$15.00	$750
								20	$20.00	$400
	26-Oct	100	$25.00	$2,500				50	$10.00	$500
								50	$15.00	$750
								20	$20.00	$400
								100	$25.00	$2,500
	Total				Cost of goods sold		$14,600	Ending inventory		$4,150
	*In LIFO method the units that have purchased last, are released the first one and the ending inventory
	units remain from the first purchases.
Ans. 3			FIFO	LIFO
	Sales		$35,200	$35,200
	(-) Cost of goods sold		($13,850)	($14,600)
	Gross margin		$21,350	$20,600
	*Calculation of sales:
	Date	Units	Rate	Cost
	10-Jan	150	$40.00	$6,000
	15-Mar	300	$40.00	$12,000
	05-Oct	430	$40.00	$17,200
	Total sales			$35,200