Question

Periodic inventory by three methods; cost of goods sold The units of an item available for sale during the year were as follows: Mar. 10 Jan. 1 Inventory 50 units at $116 Purchase 70 units at $128 Aug. 30 Purchase 10 units at $134 70 units at $136 There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the ending inventory cost and the cost of goods sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar Dec. 12 Purchase Cost of Ending Inventory and cost of Goods Sold Inventory Method Ending Inventory Cost of Goods Sold First-in, first-out (FIFO) Last-in, first-out (UFO) Weighted average cost

Answer 1

Solution :
a. FIFO - Cost of Ending Inventory and Cost of Goods Sold
Date	Particulars	Units	Per Unit	Cost
Jan-01	Beginning Inventory	50	$116	$5,800
Mar-10	Purchase	70	$128	$8,960
Aug-30	Purchase	10	$134	$1,340
Dec-12	Purchase	70	$136	$9,520
	Total	200		$25,620
Less	Ending Inventory on Dec 31	80	$135.75	$10,860
	Cost of Goods Sold	120	$123	$14,760
b. LIFO - Cost of Ending Inventory and Cost of Goods Sold
Date	Particulars	Units	Per Unit	Cost
Jan-01	Beginning Inventory	50	$116	$5,800
Mar-10	Purchase	70	$128	$8,960
Aug-30	Purchase	10	$134	$1,340
Dec-12	Purchase	70	$136	$9,520
	Total	200		$25,620
Less	Ending Inventory	50	$116	$5,800
	Ending Inventory	30	$128	$3,840
	Total	80	120.5	$9,640
	Cost of Goods Sold	120	133.1667	$15,980
c. Weighted Average Cost - Cost of Ending Inventory and Cost of Goods Sold
Date	Particulars	Units	Per Unit	Cost
Jan-01	Beginning Inventory	50	$116	$5,800
Mar-10	Purchase	70	$128	$8,960
Aug-30	Purchase	10	$134	$1,340
Dec-12	Purchase	70	$136	$9,520
	Total	200		$25,620
	Weighted Average Cost	(25620/200)		$128
	Cost of Goods Sold	(120*128)		$15,360
	Ending Inventory	(80*128)		$10,240
Summary
Inventory Method	Ending Inventory	Cost of goods sold
FIFO	$10,860	$14,760
LIFO	$9,640	$15,980
Weighted Average Cost	$10,240	$15,360