Question

Calculating the Value of Ending Inventory and Cost of Goods Sold: Perpetual Method.
Consider the following inventory data for the first two months of the year for CompX International:

	Total Units	Unit Cost	Total Cost
Beginning inventory on hand
January 1	60,000	$3.00	$180,000
Purchases during month
January 5	103,600	3.00	310,800
January 20	293,900	3.20	940,480
	457,500		$1,431,280
Sales of inventory
January 25	383,900
Beginning inventory at
February 1	73,600
Purchases during month
February 8	282,200	3.40	$959,480
February 23	153,500	3.60	552,600
	509,300
Sales of inventory
February 27	407,600
Ending Inventory	101,700

Required
1. Calculate the cost of goods sold and ending inventory for January and February under each of the following methods, assuming use of a perpetual inventory management system. Round all answers to the nearest whole number.

		January			February
		Cost of Goods Sold	Ending Inventory		Cost of Goods Sold	Ending Inventory
a.	FIFO	Answer	Answer		Answer	Answer
b.	LIFO	Answer	Answer		Answer	Answer
c.	Weighted-average*	Answer	Answer		Answer	Answer

*Do not round until your final answers.

2. Assume that the replacement cost of CompX International's ending inventory is $3.1 per unit on January 30 and $3.5 per unit on February 28. Using the LCM method, calculate the value of the ending inventory for January and February under each of the following methods. Round all answers to the nearest whole number.

		January	February
a.	FIFO	Answer	Answer
b.	LIFO	Answer	Answer
c.	Weighted-average	Answer	Answer

Answer 1

1 FIFO ! Sales 3 Units Units Rate Amount Units Purchase Rate 60000 $ 3.00 103600 $ 3.00 293900 $ 3.20 Amount $ 1,80,000.00 $ 3,10,800.00 $ 9,40,480.00 Balance Rate 60000 $ 3.00 163600 $ 3.00 163600 $ 3.00 293900 $ 3.20 457500 Amount $ 1,80,000.00 $ 4,90,800.00 $ 4,90,800.00 $ 9,40,480.00 $ 14,31,280.00 Beginning Inventory Purchased on January 5 Purchased on January 20 M N O P Q R S T U LIFO Purchase Sales Balance Units Rate Amount Units Rate Amount Units Rate Amount 60000 $3.00 $1,80,000.00 60000 $3.00 $ 1,80,000.00 103600 $3.00 $3,10,800.00 163600 $ 3.00 $ 4,90,800.00 293900 $ 3.20 $9,40,480.00 163600 $3.00 $ 4,90,800.00 293900 $3.20 $ 9,40,480.00 457500 $ 14,31,280.00 293900 $3.20 $ 9,40,480.00 90000 $3.00 $ 2,70,000.00 73600 $ 3.00 $ 2,20,800.00 383900 $ 12,10,480.0073600 $3.00 $ 2,20,800.00 4 Beginning Inventory 5 Purchased on January 5 6 Purchased on January 20 7 8 9 Sale on January 25 10 11 Ending balance in January 12 13 Purchased on February 8 14 15 16 Purchased on February 23 Sale on January 25 163600 $ 220300 $ 383900 3.00 3.20 $ 4,90,800.00 $ 7,04,960.00 $ 11,95,760.00 73600 $ 73600 $ 3.20 3.20 $ 2,35,520.00 $ 2,35,520.00 Ending balance in January 282200 $ 3.40 $ 9,59,480.00 Purchased on February 8 282200 $ 3.40 $9,59,480.00 153500 $ 3.60 $ 5,52,600.00 73600 $ 282200 $ 355800 73600 $ 282200 $ 153500 $ 509300 3.20 $ 2,35,520.00 3.40 $ 9,59,480.00 $ 11,95,000.00 3.20 $ 2,35,520.00 3.40 $ 9,59,480.00 3.60 $ 5,52,600.00 $ 17,47,600.00 Purchased on February 23 153500 $ 3.60 $5,52,600.00 73600 $3.00 $ 2,20,800.00 282200 $3.40 $ 9,59,480.00 355800 $ 11,80,280.00 73600 $3.00 $ 2,20,800.00 282200 $ 3.40 $ 9,59,480.00 153500 $ 3.60 $ 5,52,600.00 509300 $ 17,32,880.00 18 19 20 Sales on February 27 153500 $ 3.60 254100 $3.40 21 Sales on February 27 22 23 24 Ending balance in February 73600 $ 282200 $ 51800 $ 407600 3.20 $ 2,35,520.00 3.40 $ 9,59,480.00 3.60 $ 1,86,480.00 $ 13,81,480.00 101700 $ 101700 $ 3.60 3.60 $ 3,66,120.00 $ 3,66,120.00 $ 5,52,600.00 $ 8,63,940.00 28100 $ 3.40 $ 95,540.00 73600 $3.00 $ 2,20,800.00 $ 14,16,540.00 101700 $ 3,16,340.00 Ending balance in February 407600

W AD AE I AF X Y Z AA AB AC Weighted Average Purchase Sales Units Rate Amount Units Rate Amount 60000 $3.00 $1,80,000.00 103600 $3.00 $3,10,800.00 293900 $3.20 $ 9,40,480.00 Beginning Inventory Purchased on January 5 Purchased on January 20 Balance Units Rate Amount 60000 $3.00 $ 1,80,000.00 163600 $3.00 $ 4,90,800.00 163600 $3.00 $ 4,90,800.00 293900 $3.20 $ 9,40,480.00 457500 $ 3.13 $ 14,31,280.00 73600 $ 3.13 $ 2,30,256.19 Sale on January 25 383900 $ 3.13 $ 12,01,023.81 Ending balance in January 383900 $ 12,01,023.81 73600 $ 3.13 $ 2,30,256.19 Purchased on February 8 282200 $3.40 $9,59,480.00 73600 $3.13 $ 2,30,256.19 282200 $3.40 $ 9,59,480.00 355800 $ 3.34 $ 11,89,736.19 355800 $3.34 $ 11,89,736.19 153500 $ 3.60 $ 5,52,600.00 Purchased on February 23 153500 $ 3.60 $5,52,600.00 509300 $3.42 $ 17,42,336.19 Sales on February 27 407600 $ 3.42 $ 13,94,416.32 101700 $3.42 $ 3,47,919.87 Ending balance in February 407600 $ 13,94,416.32 101700 $3.42 $ 3,47,919.87

26 Requirement1 January Ending COGS Inventory tory $ 11,95,760.00 $2,35,520.00 $ 12,10,480.00 $2,20,800.00 | $ 12,01,024 $ 2,30,256 February Ending COGS Inventory $ 13,81,480.00 $3,66,120.00 $ 14,16,540.00 $3,16,340.00 $ 13,94,416 $ 3,47,920 27 28 a. FIFO 29 b. LIFO 30 c. Weighted Average 31 32 33 Requirement 2 34 a. FIFO 35 b.LIFO 36 c. Weighted Average 37 January $ 2,28,160.00 $ 2,20,800.00 $ 2,28,160.00 February $3,55,950.00 $3,16,340.00 $3,47,919.87 January Cost Market Value $ 2,35,520.00 $ 2,28,160.00 $ 2,20,800.00 $ 2,28,160.00 $ 2,30,256 '$ 2,28,160.00 February Cost Market Value $ 3,66,120.00 $ 3,55,950.00 $ 3,16,340.00 $ 3,55,950.00 $ 3,47,919.87 $ 3,55,950.00

Please do comment in case of any clarification. Thank you.