Question

Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.

Date

Activities

Units Acquired at Cost

Units Sold at Retail

Mar.

1

Beginning inventory

250

units

@ $54.00 per unit

Mar.

5

Purchase

300

units

@ $59.00 per unit

Mar.

9

Sales

410

units

@ $89.00 per unit

Mar.

18

Purchase

160

units

@ $64.00 per unit

Mar.

25

Purchase

300

units

@ $66.00 per unit

Mar.

29

Sales

280

units

@ $99.00 per unit

Totals

1,010

units

690

units

3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 140 units from beginning inventory and 270 units from the March 5 purchase; the March 29 sale consisted of 120 units from the March 18 purchase and 160 units from the March 25 purchase.

Answer 1

Solution 3:

Computation of ending inventory COGS under FIFO - Warnerwoods Co
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Mar	250	$54.00	$13,500.00	0	$0.00	$0.00	0	$0.00	$0.00	250	$54.00	$13,500.00
5-Mar	250	$54.00	$13,500.00	300	$59.00	$17,700.00	0	$0.00	$0.00	250	$54.00	$13,500.00
										300	$59.00	$17,700.00
9-Mar	250	$54.00	$13,500.00	0	$0.00	$0.00	250	$54.00	$13,500.00	140	$59.00	$8,260.00
	300	$59.00	$17,700.00				160	$59.00	$9,440.00
18-Mar	140	$59.00	$8,260.00	160	$64.00	$10,240.00	0	$0.00	$0.00	140	$59.00	$8,260.00
										160	$64.00	$10,240.00
25-Mar	140	$59.00	$8,260.00	300	$66.00	$19,800.00	0	$0.00	$0.00	140	$59.00	$8,260.00
	160	$64.00	$10,240.00							160	$64.00	$10,240.00
										300	$66.00	$19,800.00
29-Mar	140	$59.00	$8,260.00	0	$0.00	$0.00	140	$59.00	$8,260.00	20	$64.00	$1,280.00
	160	$64.00	$10,240.00				140	$64.00	$8,960.00	300	$66.00	$19,800.00
	300	$66.00	$19,800.00
Total							690		$40,160.00	320		$21,080.00

Computation of ending inventory COGS under LIFO - Warnerwoods Co
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Mar	250	$54.00	$13,500.00	0	$0.00	$0.00	0	$0.00	$0.00	250	$54.00	$13,500.00
5-Mar	250	$54.00	$13,500.00	300	$59.00	$17,700.00	0	$0.00	$0.00	250	$54.00	$13,500.00
										300	$59.00	$17,700.00
9-Mar	250	$54.00	$13,500.00	0	$0.00	$0.00	300	$59.00	$17,700.00	140	$54.00	$7,560.00
	300	$59.00	$17,700.00				110	$54.00	$5,940.00
18-Mar	140	$54.00	$7,560.00	160	$64.00	$10,240.00	0	$0.00	$0.00	140	$54.00	$7,560.00
										160	$64.00	$10,240.00
25-Mar	140	$54.00	$7,560.00	300	$66.00	$19,800.00	0	$0.00	$0.00	140	$54.00	$7,560.00
	160	$64.00	$10,240.00							160	$64.00	$10,240.00
										300	$66.00	$19,800.00
29-Mar	140	$54.00	$7,560.00	0	$0.00	$0.00	280	$66.00	$18,480.00	140	$54.00	$7,560.00
	160	$64.00	$10,240.00							160	$64.00	$10,240.00
	300	$66.00	$19,800.00							20	$66.00	$1,320.00
Total							690		$42,120.00	320		$19,120.00

Computation of ending inventory COGS under Weighted Average Cost - Warnerwoods Company
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Mar	250	$54.00	$13,500	0	$0.00	$0	0	$0.00	$0	250	$54.00	$13,500
5-Mar	250	$54.00	$13,500	300	$59.00	$17,700	0	$0.00	$0	550	$56.73	$31,200
9-Mar	550	$56.73	$31,200	0	$0.00	$0	410	$56.73	$23,258	140	$56.73	$7,942
18-Mar	140	$56.73	$7,942	160	$64.00	$10,240	0	$0.00	$0	300	$60.61	$18,182
25-Mar	300	$60.61	$18,182	300	$66.00	$19,800	0	$0.00	$0	600	$63.30	$37,982
29-Mar	600	$63.30	$37,982	0	$0.00	$0	280	$63.30	$17,725	320	$63.30	$20,257
Total							690		$40,983	320		$20,257

Computation of COGS and ending inventory - Specific identification
Particulars	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	250	$54.00	$13,500	140	$54.00	$7,560.00	110	$54.00	$5,940.00
Purchases:
5-Mar	300	$59.00	$17,700	270	$59.00	$15,930.00	30	$59.00	$1,770.00
18-Mar	160	$64.00	$10,240	120	$64.00	$7,680.00	40	$64.00	$2,560.00
25-Mar	300	$66.00	$19,800	160	$66.00	$10,560.00	140	$66.00	$9,240.00
Total	1010		$61,240	690		$41,730.00	320		$19,510.00