Question

Ch. 6 Part One: Charlie Co. has the following data about inventory, using the periodic inventory system: July 1 Beginning Inventory + 1,000 units at $2 each 5 Purchase + 2,000 units at $2.75 each 10 Sell - 2,500 units for $16 each 15 Purchase + 2,000 units at $4 each 25 Sell - 1,500 units for $12 each 1. How many units are in ending inventory? 1940 19 2. Calculate COGS for July and ending inventory on July 31" using LED- 3. Calculate COGS for July and ending inventory on July 31" using LIFO. 4. Calculate COGS for July and ending inventory on July 31" using Average Cost. l ol lol otomoto

Answer 1

Calculation Charlie Co. Reg 1 Date Decription 1-Jul Beginning Inventory 5-Jul Purchase 15-Jul Purchase Goods Available for Sale Sales Ending Inventory Quantity 1,000 2,000 2,000 5,000 4,000 1,000 =2,500-1,500= 4,000 units sold Req 2 Cost of goods sold Ending Inventory FIFO 11,500 4,000 LIFO 13,500 2,000 Average cost 12,400 3,100

Calculation =5,000-4,000 = 1,000 units at latest cost of $4 per unit =2,500-1,500=4,000 units sold Charlie Co. Periodic Inventory System Inventory sheet - FIFO Date Decription Quantity Cost per unit Total cost 1-Jul Beginning Inventory 1,000 $ 2.00 $ 2,000 5-Jul Purchase 2,000 $ 2.75 $ 5,500 15-Jul Purchase 2,000 $ 4.00 $ 8,000 Goods Available for Sale 5,000 $ 15,500 Ending Inventory 1,000 $ 4.00 $ 4,000 Cost of goods sold 4,000 $ 11,500 Inventory sheet - LIFO Date Decription Quantity Cost per unit Total cost 1-Jul Beginning Inventory 1,000 $ 2.00 $ 2,000 5-Jul Purchase 2,000 $ 2.75 $ 5,500 15-Jul Purchase 2,000 $ 4.00 $ 8,000 Goods Available for Sale 5,000 $ 15,500 Ending Inventory 1,000 $ 2.00 $ 2,000 Cost of goods sold 4,000 $ 13,500 Inventory sheet - Average weighted cost Date Decription Quantity Cost per unit Total cost 1-Jul Beginning Inventory 1,000 $ 2.00 $ 2,000 5-Jul Purchase 2,000 $ 2.75 $ 5,500 15-Jul Purchase 2,000 $ 4.00 $ 8,000 Goods Available for Sale 5,000 $ 3.10 $ 15,500 Ending Inventory 1,000 $ 3.10 $ 3,100 Cost of goods sold 4,000 $ 12,400 1,000 units at oldest cost of $2 per unit =15,500-2,000= 13,500 cogs Avg cost per unit = 15,500/5,000 = $3.10 per unit =1,000 units * $3.10 = 3,100 =15,500-3, 100= 12,400 cogs