Question

Periodic inventory by three methods; cost of goods sold

The units of an item available for sale during the year were as follows:

Jan. 1	Inventory	50 units at $122
Mar. 10	Purchase	70 units at $134
Aug. 30	Purchase	10 units at $140
Dec. 12	Purchase	70 units at $142

There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the ending inventory cost and the cost of goods sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.

Cost of Ending Inventory and Cost of Goods Sold
Inventory Method	Ending Inventory	Cost of Goods Sold
First-in, first-out (FIFO)	$	$
Last-in, first-out (LIFO)
Weighted average cost

Answer 1

Inventory method		ending inventory ($)	cost of goods sold ($)
FIFO		11340	15480
LIFO		10120	16700
Weighted average cost		10728	16092

calculations a per below -

FIFO

	FIFO
	units	price per unit ($)	total ($)
Dec.12	70	142	9940
Aug.30 (70 units - 80 units)	10	140	1400
cost of ending inventory	80		11340

	units	price per unit ($)	total ($)
Jan.1	50	122	6100
Mar.10	70	134	9380
Aug.30	10	140	1400
Dec.12	70	142	9940
total cost of units available for sale	200		26820
less cost of ending inventory	-80		-11340
cost of units sold	120		15480

LIFO

	LIFO
	units	price per unit ($)	total ($)
Jan.1	50	122	6100
Mar.10 (80 units - 50 units)	30	134	4020
cost of ending inventory	80		10120
	units	price per unit ($)	total ($)
Jan.1	50	122	6100
Mar.10	70	134	9380
Aug.30	10	140	1400
Dec.12	70	142	9940
total cost of units available for sale	200		26820
less cost of ending inventory	-80		-10120
cost of units sold	120		16700

Weighted average cost

	weighted average cost method
	units	price per unit ($)	total ($)
Jan.1	50	122	6100
Mar.10	70	134	9380
Aug.30	10	140	1400
Dec.12	70	142	9940
	200		26820
average cost ($26820/200)			134.1
cost of ending inventory	80	134.1	10728
	units	price per unit ($)	total ($)
Jan.1	50	122	6100
Mar.10	70	134	9380
Aug.30	10	140	1400
Dec.12	70	142	9940
total cost of units available for sale	200		26820
less cost of ending inventory	80		-10728
cost of units sold	120		16092