Question

Causwell Company began 2021 with 17,000 units of inventory on hand. The cost of each unit was $5.00. During 2021 an additional 35,000 units were purchased at a single unit cost, and 27,000 units remained on hand at the end of 2021 (25,000 units therefore were sold during 2021). Causwell uses a periodic inventory system. Cost of goods sold for 2021, applying the average cost method, is $142,500. The company is interested in determining what cost of goods sold would have been if the FIFO or LIFO methods were used. Exercise 8-18 (Algo) Part 2 Required: 2. Determine the cost of goods sold for 2021 using the LIFO method. (Do not round intermediate calculations.)

Answer 1

I Answers I weighted Average est Method - One of the most important method in iquentary ugliation Tis the weighted average cost method. Ending Iquenby ynder I weighted Average cost method is celelaled by numbes' of 41|ts multiplier y the weighted average price weighted average price is also I helpful to calculate the cost of Goods sold Wejahter Average_ to Total cost of Goods Avg)lalle. for Sale Toty) No. of Units Available for såle In the question, we have not given the purchase price of additional purchare made during the year. It is calculated by the first by calculating the weighled average price Then hom such total cost of gools available for sale will be calculated and finally opening cost of gools of inventory is setuched by the toty) cost of goods quailable and divide it by the auditong) Archone Wejchled Average cost of Goods' soll = weighted Average life X Gools sold . Weighted Average = Cost of Goods sold . furce - Volts sok During the yeux. $ 142500 25000 yosts Weighted Average Andse $ 5.70 per yg jt. Cost of Goods Available for sale = weighted Aug. Pojce X Tobyl Goals - $ 5.70 X_(17000 34000) 41165 : $ 296400.

i furchase price of Aldisina) - $ C296400 - (17000 units X $5) Purchase Mate 35000 yalts - $ 211400 35000 moita e $6.04 per uolt it to Determination of Cost of Goods sold under FI fo qal lifo methol 101) Fifo method (Units sold : 25000 unito 4 : ID FI to Method je first_in_first oft method _goods which comes first in store is sold first Cost of Goods (17000 units X $ 5 t sold unler firo ( 8000 units X $6.04) : $ (85000 + 48320) | Cost of Goods soll uglev fIfo :. $_133,320 (2) LIho Method Cogits sold 3 23000 491 431) In Liro Method is Last 1n_first out method, iwegtory which comes last should be soll first cost of Gools = $ (25000 units X $6.04) soll unter LIGO cost of Goals sold ynder Lilo : $ 15,000 cost of Goods coll is the total units sold by the - causwell company soll during the year