Question

Assume that a company started July with 60 units of merchandise inventory that cost S68 each. During Jly, the company made the following purchases: (Click the icon to view the purchases.) The company uses a periodic inventory system. Assume that a physical inventory count on July 31 indicates that 90 units are on hand. (For weighted-average calculations, round per unit costs to the nearest cent and all other amounts to the nearest dollar.) Data Table (A) Calculate the cost of ending inventory, and cost of goods sold for July, using each inventory costing method. Ju. 3 40 units@ 72 each FIFO LIFO Weighted-average 2 50 unitsS 90 each Ending inventory 18 30 unitsS 92 each Cost of goods sold Print Done (B) Assume that total sales revenue for July was $23,000. Calculate gross profit for July using each inventory costing method. st LIFO Cost Weighted-average Gross profit

Answer 1

Answers

• Requirement ‘a’

	FIFO	LIFO	Weighted Average
Ending Inventory	$      7,980.00	$              6,240.00	$                 7,110.00
Cost of Goods Sold	$      6,240.00	$              7,980.00	$                 7,110.00

• Requirement ‘b’

	FIFO	LIFO	Weighted Average Method
Sales Revenue	$    23,000.00	$            23,000.00	$               23,000.00
(-) Cost of Goods Sold	$      6,240.00	$              7,980.00	$                 7,110.00
Gross Profits = ANSWERS	$    16,760.00	$            15,020.00	$               15,890.00

• Workings

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	60	$                68.00	$                        4,080.00	60	$               68.00	$                 4,080.00	0	$                 68.00	$                         -
Purchases:
03-Jul	40	$                72.00	$                        2,880.00	30	$               72.00	$                 2,160.00	10	$                 72.00	$                720.00
12-Jul	50	$                90.00	$                        4,500.00	0	$               90.00	$                              -	50	$                 90.00	$            4,500.00
18-Jul	30	$                92.00	$                        2,760.00	0	$               92.00	$                              -	30	$                 92.00	$            2,760.00
TOTAL	180		$                      14,220.00	90		$                 6,240.00	90		$            7,980.00
LIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	60	$                68.00	$                        4,080.00	0	$               68.00	$                              -	60	$                 68.00	$            4,080.00
Purchases:	0	$                       -	$                                     -
03-Jul	40	$                72.00	$                        2,880.00	10	$               72.00	$                     720.00	30	$                 72.00	$            2,160.00
12-Jul	50	$                90.00	$                        4,500.00	50	$              90.00	$                 4,500.00	0	$                 90.00	$                         -
18-Jul	30	$                92.00	$                        2,760.00	30	$               92.00	$                 2,760.00	0	$                 92.00	$                         -
TOTAL	180		$                      14,220.00	90		$                 7,980.00	90		$            6,240.00

Weighted Average (Periodic)	Units	Cost per unit	Total
Beginning Inventory	60	$            68.00	$       4,080.00
Purchases:
03-Jul	40	$            72.00	$       2,880.00
12-Jul	50	$            90.00	$       4,500.00
18-Jul	30	$            92.00	$       2,760.00
Total Purchases	120		$     10,140.00
Goods Available for Sales	180		$     14,220.00
Weighted Average cost per unit		$          79.000
Cost of Goods Sold	90	$          79.000	$       7,110.00
Ending Inventory	90	$          79.000	$       7,110.00