Question

Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December 31, the accounting records for the most popular item in inventory showed the following: Units 380 Unit Cost $3.00 Transactions Beginning inventory, January 1 Transactions during the year: a. Purchase, January 30 b. Purchase, May 1 c. Sale ($5 each) d. Sale ($5 each) 3.20 4.00 280 440 (140) (680) Required: a. Compute the amount of goods available for sale. b. & c. Compute the amount of ending inventory and cost of goods sold at December 31, under Average cost, First-in, first-out, Last-in, first-out and Specific identification inventory costing methods. For Specific identification, assume that the first sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the second sale was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1. Complete this question by entering your answers in the tabs below. Req A Req B and C

Answer 1

	Periodic	Weighted Average	FIFO	LIFO	Specific Identification
	Ending Inventory	$               966	$       1,120	$           840	$               963
	Cost of goods sold	$           2,829	$       2,676	$       2,956	$           2,833
	Workings:
1A	FIFO	Cost of goods available for sale			Cost of goods sold - Periodic FIFO			Ending Inventory - Periodic FIFO
	Beginning Inventory	380	$         3.00	$       1,140	380	$       3.00	$       1,140	-	$       3.00	$              -
	Purchases:
	Jan-30	280	$         3.20	$           896	280	$       3.20	$           896	-	$       3.20	$              -
	May-01	440	$         4.00	$       1,760	160	$       4.00	$           640	280	$       4.00	$       1,120
		1,100		$       3,796	820		$       2,676	280		$       1,120
1B	LIFO	Cost of goods available for sale			Cost of goods sold - Periodic LIFO			Ending Inventory - Periodic LIFO
	Beginning Inventory	380	$         3.00	$       1,140	100	$       3.00	$           300	280	$       3.00	$           840
	Purchases:
	Jan-30	280	$         3.20	$           896	280	$       3.20	$           896	-	$       3.20	$              -
	May-01	440	$         4.00	$       1,760	440	$       4.00	$       1,760	-	$       4.00	$              -
		1,100		$       3,796	820		$       2,956	280		$           840
1C	Average Cost	Cost of goods available for sale			Cost of goods sold - Average Cost			Ending Inventory - Average Cost
	Beginning Inventory	380	$         3.00	$       1,140
	Purchases:
	Jan-30	280	$         3.20	$           896
	May-01	440	$         4.00	$       1,760
		1,100		$       3,796	820	$       3.45	$       2,829	280	$       3.45	$           966
	*Average Cost	=	Cost of goods available for sale / No. Of units
		=	$3796/1100 units
		=	$                                                                                                                                                                             3.45
1D	Specific Identification	Cost of goods available for sale			Cost of goods sold - Periodic LIFO			Ending Inventory - Periodic LIFO
	Beginning Inventory	380	$         3.00	$       1,140	380	$       3.00	$       1,140	-	$       3.00	$              -
	Purchases:
	Jan-30	280	$         3.20	$           896	84	$       3.20	$           269	196	$       3.20	$           627
	May-01	440	$         4.00	$       1,760	356	$       4.00	$       1,424	84	$       4.00	$           336
		1,100		$       3,796	820		$       2,833	280		$           963
			Beginning Inventory	Jan-30	May-01
	Total units		380	280	440
	First sale	140 X 2/5	56
		140 X 3/5		84
	Remaining balance		324	280	440
	Second sale	balance of beginning inventory	324
		(680 - 324)			356
	Ending units		0	280	440