Question

Urban Glam Cosmetics made purchases of Lipstick in the current year as follows:

Urban Glam Cosmetics made sales on the following dates at a selling price of \(\$ 35\) per unit:

Required:

The business uses a perpetual inventory system.

1. Determine the costs that should be assigned to the ending Inventory and to goods sold under the following methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

   
   

Answer 1

Step 1 FIFO PERPETUAL

FIFO Perpetual:
		Purchase			Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	1-Jan	75	$12	$900				75	$12	$900
	10-Jan				70	$12	$840	5	$12	$60
	14-Mar	250	$13	$3,250				5	$12	$60
								250	$13	$3,250
	15-Mar				5	$12	$60
					175	$13	$2,275	75	$13	$975
	30-Jul	500	$14	$7,000				75	$13	$975
								500	$14	$7,000
	5-Oct				75	$13	$975
					375	$14	$5,250	125	$14	$1,750
	Total				Cost of goods sold		$9,400	Cost of Ending inventory		$1,750

*In FIFO method the units that have purchased first are released the first one.

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Step 2 WEIGHTED AVERAGE PERPETUAL

	Purchase			Cost of goods sold			Balance
	Date	Quantity	Rate	Total cost	Quantity	Rate	Total cost	Quantity	Rate	Total cost
	1-Jan	75	$12	$900				75	$12.00	$900
	10-Jan				70	$12	$840	5	$12	$60
	14-Mar	250	$13	$3,250				255	$12.98	$3,310
	15-Mar				180	$12.98	$2,336.40	75	$12.98	$973.50
	30-Jul	500	$14	$7,000				575	$13.87	$7,973.50
	5-Oct				450	$13.87	$6,241.50	125	$13.87	$1,733.75
	Total				Cost of goods sold		$9417.90	Cost of Ending inventory		$1,733.75

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Step 3 Final Answer

		Ending inventory	Cost Of goods sold
a.	FIFO	$1,750	$9,400
b.	MOVING WEIGHTED AVERAGE	$1733.75	$9417.90