Question

Synergy Company began 2020 with 19,500 units of Product X in its inventory that cost $7.60 per unit, and it made successive purchases of the product as follows: Mar. May Aug. Nov. 7 26,500 units @ $ 9.10 each 25 31,500 units @ $11.10 each 1 22,000 units @ $12.10 each 10 31,500 units @ $13.60 each The company uses a periodic inventory system. On December 31, 2020, a physical count disclosed that 15,500 units of Product X remained in inventory. Required: 1. Calculate the number and total cost of the units available for sale during 2020, Number of units Total cost of the units 2. Prepare calculations showing the amounts that should be assigned to the 2020 ending inventory and to cost of goods sold, assuming a. FIFO Total cost of the units for sale Next > Prev 11 of 17 !!!

Answer 1

1.

		Available for Sale
Date	Activity	Units	Unit Price	Amount
Jan-01	Beginning Inventory	19500	$                7.60	$      148,200
Mar-07	Purchase	26500	$                9.10	$      241,150
May-25	Purchase	31500	$              11.10	$      349,650
Aug-01	Purchase	22000	$              12.10	$      266,200
Nov-10	Purchase	31500	$              13.60	$      428,400
	Total	131000		$   1,285,400

Units available for sale = 131,000
Total Cost of the Units = $1,285,400

2.
a. FIFO
Ending Inventory = 15500 x $13.60 = $210,800
Cost of Goods Sold = $1285400 - 210800 = $1,074,600

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