Question

Information relating to Scott Company inventory during 2010 is given below
COST OF GOODS AVAILABLE FOR SALE
Date Explanation Units Unit Cost TotalCost

Jan. 1 Beginning inventory 100 $200 $20,000

Mar. 15 Purchase 300 224 67,200

   July 20 Purchase 250 235 58,750

Sept. 4 Purchase 200 238 47,600

   Dec. 2 Purchase 100 250 25,000

   Total 950 $218,550

By year end, 700 units were sold. Scott Company uses a periodic inventory system.


Required:
Determine (1) the cost of the ending inventory and (2) the cost of goods sold under FIFO, and weighted average.

Answer 1

FIFO Method

	Units	Rate	Amount
Sale from beginning inventory	100	$   200	$     20,000
Sale from March 15 purchase	300	$   224	$     67,200
Sale from July 20 purchase	250	$   235	$     58,750
Sale from Sep 4 purchase	50	$   238	$     11,900
Cost of goods sold	700		$   157,850

	Units	Rate	Amount
Balance from Sep 4 purchase	150	$   238	$   35,700
Balance from Dec 2 purchase	100	$   250	$   25,000
Ending inventory	250		$   60,700

LIFO Method

	Units	Rate	Amount
Sale from Dec 2 purchase	100	$   250	$     25,000
Sale from Sep 4 purchase	200	$   238	$     47,600
Sale from July 20 purchase	250	$   235	$     58,750
Sale from March 15 purchase	150	$   224	$     33,600
Cost of goods sold	700		$   164,950

	Units	Rate	Amount
Balance from March 15 purchase	150	$   224	$   33,600
Balance from Beginning inventory	100	$   200	$   20,000
Ending inventory	250		$   53,600

Weighted Average method

Number of units available for sale	950
Cost of goods available for sale	$   218,550
Weighted average cost per unit ($218,550/950)	$           230

Cost of goods sold = 700*$230

Cost of goods sold = $161,000

Ending inventory = 250*$230

Ending inventory = $57,500

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