Question

Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki's records show the following for the month of January. Sales totaled 320 units. Beginning Inventory Purchase Purchase Date January 1 January 15 January 24 Units Unit Cost Total Cost 180 $ 70 $12,600 490 8 0 3 9,200 280 100 28,000 Required: 1. Calculate the number and cost of goods available for sale. 2. Calculate the number of units in ending inventory. 3. Calculate the cost of ending inventory and cost of goods sold using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the cost of ending inventory and cost of goods sold using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods. Cost of Ending Inventory Cost of Goods Sold FIFO LIFO Weighted Average Cost

Answer 1

Ans. 1	Available for sale
	Date	Units	Rate	Total
	01-Jan	180	$70.00	$12,600
	15-Jan	490	$80.00	$39,200
	24-Jan	280	$100.00	$28,000
	Cost of goods available for sale	950		$79,800
	Number of units available for sale = 950 units
	Cost of goods available for sale = $79,800
Ans. 2	Units in ending inventory   =    Units available for sale - Units sold
	950 - 320
	630 units
Ans. 3		Cost of Ending	Cost of Goods
		Inventory	Sold
	FIFO	$56,000	$23,800
	LIFO	$48,600	$31,200
	Weighted Average Cost	$52,920	$26,880
	*Calcualations:
A	Periodic FIFO:
	Date	Units	Rate	Total
	01-Jan	180	$70.00	$12,600
	15-Jan	140	$80.00	$11,200
	Cost of goods sold	320		$23,800
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory
	units remain from the last purchases.
	Ending inventory = Total cost of goods available for sale -   Cost of goods sold
	$79,800 - $23,800
	$56,000
B	Periodic LIFO:
	Date	Units	Rate	Total
	24-Jan	280	$100.00	$28,000
	15-Jan	40	$80.00	$3,200
	Cost of goods sold	320		$31,200
	*In LIFO method the units that have purchased last, are released the first one and ending inventory units
	remain from the first purchase.
	Ending inventory = Total cost of goods available for sale -   Cost of goods sold
	$79,800 - $31,200
	$48,600
C	Periodic Weighted Average:
	Average cost per unit =   Total cost of goods available for sale / Total units available
	$79,800 / 950
	$84.00	per unit
	Cost of goods sold   =   No. of units sold * Average cost per unit
	320 * $84
	$26,880
	Ending inventory = Total cost of goods available for sale -   Cost of goods sold
	$79,800 - $26,880
	$52,920