Question

Problem 6-03A a, b1-b2, c (Part Level Submission) (Video)

Oriole Company had a beginning inventory on January 1 of 323 units of Product 4-18-15 at a cost of $20 per unit. During the year, the following purchases were made.

Mar. 15

860 units

at

$23

Sept. 4

753 units

at

$26

July 20

538 units

at

$24

Dec. 2

215 units

at

$29

2,150 units were sold. Oriole Company uses a periodic inventory system.

Determine the cost of goods available for sale.

The cost of goods available for sale

$ 64,965

Calculate average cost per unit. (Round answer to 2 decimal places, e.g. 2.23.)

Average cost per unit

$24.16

Determine (1) the ending inventory, and (2) the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods. (Round answers to 0 decimal places, e.g. 1,250.)

		FIFO		LIFO		AVERAGE-COST
The ending inventory		$		$		$
The cost of goods sold		$		$		$

Answer 1

	Cost of Goods available for sale
	Units	Cost/unit	COG for sale
Beginning Inventory	323	20	6460
Purchases:
Mar, 15	860	23	19780
july 20,	538	24	12912
Sept, 4	753	26	19578
Dec, 2	215	29	6235
TOTAL	2689		64965
Average cost per unit = Cost of goods available for sale /Total units = 64965/2689 =			24.16
Requirement ‘b’
FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
A	B	Cost/unit	D	E	F	H	H	I	J
	Units	Cost/unit	COG for sale (A*B)	Units sold	Cost/unit	COGS = (E*F)	Units	Cost/unit	Ending inventory = (H*I)
Beginning Inventory	323	20	6460	323	20	6460	0	20	0
Purchases:
Mar, 15	860	23	19780	860	23	19780	0	23	0
july 20,	538	24	12912	407	24	9768	131	24	3144
Sept, 4	753	26	19578		26	0	753	26	19578
Dec, 2	215	29	6235		29	0	215	29	6235
TOTAL	2689		64965	1590		36008	1099		28957
LIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
A	B	Cost/unit	D	E	F	H	H	I	J
	Units	Cost/unit	COG for sale (A*B)	Units sold	Cost/unit	COGS = (E*F)	Units	Cost/unit	Ending inventory = (H*I)
Beginning Inventory	323	20	6460	0	20	0	323	20	6460
Purchases:
Mar, 15	860	23	19780	84	23	1932	776	23	17848
july 20,	538	24	12912	538	24	12912	0	24	0
Sept, 4	753	26	19578	753	26	19578	0	26	0
Dec, 2	215	29	6235	215	29	6235	0	29	0
TOTAL	2689		64965	1590		40657	1099		24308
Average Method	Cost of Goods available for sale
	Units	Cost/unit	COG for sale (A*B)
Beginning Inventory	323	20	6460
Purchases:
Mar, 15	860	23	19780
july 20,	538	24	12912
Sept, 4	753	26	19578
Dec, 2	215	29	6235
TOTAL	2689		64965
Average cost per unit = Cost of goods available for sale /Total units = 64965/2689 =			24.16
Cost of goods sold = Units sold * Average cost per unit = 1590*24.16 =38414
Ending inventory = Balance units * Average cost per unit = 1099*24.16 =26551
	FIFO	LIFO	Average Cost
Ending Inventory	28957	24308	26551
Cost of Goods Sold [ units]	36008	40657	38414
Total	64965	64965	64965