Question

Carrington Inc. reported the following information for the month of August: Inventory, August 1 55 units @ $26 Purchase: August 7 49 units $27 66 units @ $29 August 18 August 27 41 units $31 During August, Carrington sold 134 units. The company uses a periodic inventory system. Required: What is the value of ending Inventory and cost of goods sold for August under the following assumptions. Assumption Cost of Goods Sold Ending Inventory 1. Of the 134 units sold, 46 cost $26, 34 cost $27, 50 cost $29, and 4 cost $31. 3,688 ✓ 2,250 2. FIFO 3,623 ✓ 2,315 → 3. LIFO 3,914 7 2,024 V 4. Weighted average method (Round average unit cost to the nearest cent, and round all other calculations and your final answers to the nearest dollar) 28.14 X 5,909.867 X

Answer 1

Solution:

Calculation of Ending Inventory Weighted Average Method

Cost of Good Sold Ending Inventory 4 Weighted Average Method $ 3,771 $ 2,167

Working:

Unit Beg Inv Purchase 1 Purchase 2 Purchase 3 Total Unit cost Total Cost (Unit * Unit Cost) 55 $ 26 $ 1,430 49 $ 27 $ 1,323 66 $ 29 $ 1,914 41 $ 31 $ 1,271 211 $ 5,938 Weighted Average Cost = $5,938 / 211 Units = $28.14 Units in Stock = Total Units Availaible - Sold Units = 211 Units - 134 Units = 77 Units Ending Stock Value = 77 Units * $28.14 = $ 2167 Cost of Good Sold = $5,938 - 2167 = $3,771