Question

Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 30 units @ $112 Mar. 10 Purchase 70 units @ $122 Aug. 30 Purchase 30 units @ $126 Dec. 12 Purchase 70 units @ $132 There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar. Cost of Merchandise Inventory and Cost of Merchandise Sold Inventory Method Merchandise Inventory Merchandise Sold First-in, first-out (FIFO) $ $ Last-in, first-out (LIFO) Weighted average cost

Answer 1

	Unit	Unit Cost	Total Cost
Beginning inventory	30	112	3360
Purchase 1	70	122	8540
Purchase 2	30	126	3780
Purchase 3	70	132	9240
Total	200		24920

Calculate following :

	Cost of ending inventory	Cost of goods sold
FIFO	(70*132+10*126) = 10500	24920-10500 = 14420
LIFO	(30*112+50*122) = 9460	24920-9460 = 15460
Weighted average	24920/200*80 = 9968	24920-9968 = 14952