Question

2) Consider the following information for Maynor Company, which uses a periodic inventory system: Unit Transaction Units Cost January 1 Beginning Inventory 10 $ 60 March 28 Purchase 206 6 August 22 Purchase October 14 Purchase Goods Available for Sale Total Cost $ 600 1,320 1,400 1,900 $ 5,220 75 The company sold 25 units on May 1 and 20 units on October 28. Required: Calculate the company's ending inventory and cost of goods sold using the each of following inventory costing methods. (Round the per unit cost to 2 decimal places and then round your answers to the nearest whole dollar.) a. FIFO b. LIFO c. Weighted Average

Answer 1

Units 10 Unit cost Total cost 60.00 600 20 20 25 66.00 70.00 76.00 13201 1400 1900 5220 FIFO (Periodic) Beginning Inventory Jan 1 Inventory Balance Purchases: March 28 Purchases August 22 Purchases October 14 Purchases Goods Available for sale Cost of goods sold Units from Jan 1 Inventory Balance Units from March 28 Purchases Units from August 22 Purchases Cost of goods Sold Units from August 22 Purchases Units from October 14 Purchases Cost of Ending inventory 6001 10 60.00 20166.00 70.00 457 13201 1050 2970 350 1900 2250 5 70.00 2576.00 30

units 10 unit cost Total cost 60.00 600 1320 20 66.00 70.00 76.00 14001 Periodic: LIFO Beginning Inventory Jan 1 Inventory Balance Purchases: March 28 Purchases August 22 Purchases October 14 Purchases Goods Available for sale Sales (Issue-LIFO) Units from October 14 Purchases Units from August 22 Purchases Cost of goods Sold Units from March 28 Purchases Units from Jan 1 Inventory Balance Cost of Ending Inventory 1900 5220) 2576.00 70.00 66.00 60.00 1900 1400 3300 13201 600 1920 10

unit cost Total cost 60.00 600 Periodic: Weighted Average Cost units Jan 1 Inventory Balance 10 Purchases: March 28 Purchases August 22 Purchases October 14 Purchases Goods Available for sale Cost of goods Sold Cost of Ending Inventory 66.00 70.00 76.00 69.601 69.60 69.60 1320 1400 1900 5220 3132 2088