Question

2. Shown below is activity for one of the products of Weasel:

January 1 balance, 220 units at $50 for a total of $11,000

Purchases: January 10-200 units at $42

                     January 20-500 units at $55

Sales: January 12-350 units

             January 28-425 units

a. Compute the ending inventory and cost of goods sold assuming Weasel uses FIFO.

b. Compute the ending inventory and cost of goods sold assuming Weasel uses LIFO and perpetual inventory system.

c. Compute the ending inventory and cost of goods sold assuming Weasel uses average cost and a perpetual inventory system.

d. Compute the ending inventory and cost of goods sold assuming Weasel uses LIFO and a periodic inventory system.

e. Compute the ending inventory and costs of goods sold assuming Weasel uses average cost and periodic inventory system.

Please Show Work

Answer 1

Perpetual Inventory system FFO purchased Unit Cost Total $ Sold BALANCE Unit Cost Total $ Unit Cost Total $ Units Units Units Date 1-Jan 220 50 11000 10-Jan 200 42 8400 220 50 11000 200 42 8400 12-Jan 220 50 11000 130 42 5460 70 42 2940 20-Jan 27500 500 55 70 42 2940 500 55 27500 28-Jan 70 42 2940 355 55 19525 145 55 7975 38,925.00 Ending Inventory Total Cost of Goods Sold 7,975.00 a

Perpetual Inventory system LIFO purchased Unit Cost Total $ Sold BALANCE Units Unit Cost Total $ Unit Cost Total $ Units Units Date 1-Jan 220 50 11000 10-Jan 200 42 8400 220 50 11000 200 42 8400 12-Jan 200 42 8400 150 50 7500 70 50 3500 20-Jan 500 55 27500 70 50 3500 500 55 27500 28-Jan 425 55 23375 70 50 3500 75 55 4125 39,275.00 Ending Inventory b) Total Cost of Goods Sold 7,625.00

Perpetual Inventory system Average Cost - purchased Sold BALANCE Unit Cost Total $ Unit Cost Total $ Unit Cost Total $ Units Units Units Date 1-Jan 220 50 11000 10-Jan 200 42 8400 420 46 19320 (Average rate (50+42)/2 12-Jan 350 46 16100 70 46 3220 |(Average rate (46+55)/2 20-Jan 500 55 27500 570 50.5 28785 28-Jan 425 50.5 21462.5 145 50.5 7322.5 Ending Inventory Total Cost of Goods Sold 37,562.50 7,322.50 d) Periodic Inventory - LIFO Ending Inventory Unsold Quandity Last purchased per unit cost 7,975.00 145*55= Cost of Goods sold sold Quandity* Last purchased per unit cost 775*55 42,625.00

e) Periodic Inventory -Average cost Ending Inventory Unsold Quandity* Average rate for the period 145*49 7,105.00 Average rate for the period- Rates/No of Rates | 50+42+55/3 49 Cost of Goods sold sold Quandity Average rate for the period 775*49 37,975.00