Question

Required information M7-7 to M7-9 Calculating Cost of Goods Available for Sale, Ending Inventory, Sales, Cost of Goods Sold, and Gross Profit under Periodic FIFO, LIFO, and Weighted Average Cost [LO 7-3] [The following information applies to the questions displayed below.] The following are the transactions for the month of July. Uni ts Unit Cost Unit Selling Price Beginning Inventory Purchase $10 July 1 July 13 July 25 July 31 50 250 13 (100) $15 Sold 200 Ending Inventory
Can you also explain how do you get the answers. Thank you

Answer 1

Solution

FIFO (Periodic)
	Units	Cost per unit	Total
Beginning Inventory	50	$                10.00	$         500.00*
Purchases
13-Jul	250	$                13.00	$     3,250.00
Goods available for sale	300		$     3,750.00
Cost of Goods sold
From beginning Inventory	50	$                10.00	$         500.00
From goods purchased	50	$                13.00	$         650.00
Total cost of good sold	100		$     1,150.00
Ending Inventory			$     2,600.00**
FIFO (Periodic)
Sales	$          1,500.00
Cost of Goods sold	$          1,150.00
Gross Profit	$              350.00

*Units x Cost per unit

**Ending Inventory = Goods available for sale (that is 3750) minus cost of goods sold.

Units sold will 50 out of Beginning inventory and another 50 from purchase from july. The First in first out means units purchased first are also sold first.