Larson Company’s record of transactions for the month of April was as follows. Purchases Sales April 1
Show your calculations.
A. Calculate Ending Inventory and Cost of Goods Sold using the periodic average cost method.
B. Calculate Ending Inventory and Cost of Goods Sold using the periodic LIFO method.
C. Calculate Ending Inventory and Cost of Goods Sold using the periodic FIFO method.
D. What is Gross Profit using the periodic FIFO method?
Solution
Weighted Average | |
Ending Inventory | $ 4,898 |
Cost of Goods Sold | $ 33,062 |
.
LIFO | |
Ending Inventory | $ 4,050 |
Cost of Goods Sold | $ 33,910 |
.
FIFO | |
Ending Inventory | $ 5,660 |
Cost of Goods Sold | $ 32,300 |
.
Gross profit by FIFO = $27,200
Working
Units | Cost per unit | value | |
Beginning Balance | 700 | $ 5.00 | $ 3,500 |
Purchases | |||
1600 | $ 5.50 | $ 8,800 | |
1000 | $ 6.00 | $ 6,000 | |
1400 | $ 6.50 | $ 9,100 | |
900 | $ 7.00 | $ 6,300 | |
600 | $ 7.10 | $ 4,260 | |
Cost of goods available for sale | 6200 | $ 37,960 |
.
Average Cost of Inventory | ||
Units | (A) | 6200 |
Total Cost | (B) | $ 37,960 |
Average Cost | (C=B/A) | $ 6.12 |
.
FIFO | ||||
Total Units Available for sale | 6200 | |||
Units Sold | 5400 | |||
Closing Stock in Units | 800 | |||
Valuation | ||||
Ending Inventory | 600 | @ | $ 7.10 | $ 4,260 |
200 | @ | $ 7.00 | $ 1,400 | |
Value Of Ending Inventory | $ 5,660 | |||
Cost of Goods sold | 37960 minus 5660 | $ 32,300.00 | ||
LIFO | ||||
Total Units Available for sale | 6200 | |||
Units Sold | 5400 | |||
Closing Stock in Units | 800 | |||
Valuation | ||||
Ending Inventory | 700 | @ | $ 5.00 | $ 3,500 |
100 | @ | $ 5.50 | $ 550 | |
Value Of Ending Inventory | $ 4,050 | |||
Cost of Goods sold | 37960 minus 4050 | $ 33,910 | ||
Weighted Average method | ||||
Total Units Available for sale | 6200 | |||
Units Sold | 5400 | |||
Closing Stock in Units | 800 | |||
Valuation | ||||
Ending Inventory | 800 | @ | $ 6.12 | $ 4,898 |
Value Of Ending Inventory | $ 4,898 | |||
Cost of Goods sold | (Total Purchase and opening stock Minus Closing Stock) | $ 33,062 |
.
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