Question

. 7. (12 points)Ehlo Company is a multiproduct firm. Presented below is information concerning one of its products, the Hawkeye.DateTransactionQuantityPrice/Cost1/1Beginning inventory2,980$142/4Purchase3,980222/20Sale4,7204/2Purchase4,980287/17Purchase3,1003311/4Sale5,180Compute cost of goods sold, assuming Ehlo uses: Cost of goods sold(a)Periodic system, FIFO cost flow$(b)Perpetual system, FIFO cost flow$(c)Periodic system, LIFO cost flow$(d)Perpetual system, LIFO cost flow$(e)Periodic system, weighted-average cost flow$(f)Perpetual system, moving-average cost flow$

7. (12 points) Ehlo Company is a multiproduct firm. Presented below is information concerning one of its products, the Hawkeye. 22. Date Transaction 1/1 Beginning inventory 2/4 Purchase 2/20 Sale 4/2 Purchase 7/17 Purchase 11/4 Sale Quantity Price/Cost 2,980 $14 3,980 4,720 4,980 3,100 5,180 Compute cost of goods sold, assuming Ehlo uses: Cost of goods sold + + (a) Periodic system, FIFO cost flow (b) Perpetual system, FIFO cost flow (c) Periodic system, LIFO cost flow (d) Perpetual system, LIFO cost flow (e) Periodic system, weighted average cost flow (f) Perpetual system, moving-average cost flow + + +

Answer 1

Perpetual System Under FIFO : Purchase Cost Date COGS Cost Quantity Cost Quantity Cost Ending Inventory Quantity Cost Cost 2980 $ 14.00 $ 41,720.00 Jan-19 04-Feb 3980 $ 22.00 $ 87,560.00 2980 $ 14.00 3980 $ 22.00 $ 41,720.00 $ 87,560.00 20-Feb 2980 $ 14.00 1740 $ 22.00 $ 41,720.00 $ 38,280.00 2240 $ 22.00 $ 49,280.00 02-Apr 4980 $ 28.00 $139,440.00 2240 $ 22.00 4980 $ 28.00 $ 49,280.00 $ 139,440.00 17-Jul 3100 $ 33.00 $ 102,300.00 2240 $ 22.00 4980 $ 28.00 3100 $ 33.00 $ 49,280.00 $ 139,440.00 $ 102,300.00 04-Nov 2240 $ 22.00 2940 $28.00 $ 49,280.00 $ 82,320.00 2040 $ 28.00 3100 $ 33.00 $ 57,120.00 $ 102,300.00 9900.00 $ 211,600.00 5140.00 $ 159,420.00

Perpetual System Under LIFO : Purchase Cost Date Quantity Cost COGS Cost Quantity Cost Ending Inventory Quantity Cost Cost 2980 $ 14.00 $ 41,720.00 Jan-19 04-Feb 3980 $ 22.00 $ 87,560.00 2980 $ 14.00 3980 $ 22.00 $ 41,720.00 $ 87,560.00 20-Feb 740 $ 14.00 3980 $ 22.00 $ 10,360.00 $ 87,560.00 2240 $ 14.00 $ 31,360.00 02-Apr 4980 $ 28.00 $139,440.00 2240 $ 14.00 4980 $28.00 $ 31,360.00 $ 139,440.00 17-Jul 3100 $ 33.00 $ 102,300.00 2240 $ 14.00 4980 $28.00 3100 $ 33.00 $ 31,360.00 $ 139,440.00 $ 102,300.00 04-Nov 3100 $ 33.00 2080 $28.00 $ 102,300.00 $ 58,240.00 2240 $ 14.00 2900 $28.00 $ 31,360.00 $ 81.200.00 9900.00 $ 258,460.00 5140.00 $ 112,560.00

Perpetual System Under Weighted Avg Purchase Cost Date Quantity Cost COGS Cost Quantity Cost Ending Inventory Quantity Cost Cost 2980 $ 14.00 $ 41,720.00 Jan-19 04-Feb 3980 $ 22.00 $ 87,560.00 2980 $ 14.00 3980 $ 22.00 6960 $ 18.57 $ 41,720.00 $ 87,560.00 $129,280.00 20-Feb 4720 $ 18.57 $ 87,672.64 2240 $ 18.57 $ 41,607.36 02-Apr 4980 $ 28.00 $ 139,440.00 2240 $ 18.57 $ 41,607.36 4980 $ 28.00 $139,440.00 7220 $ 25.08 $ 181,047.36 17-Jul 3100 $ 33.00 $ 102,300.00 7220 $ 25.08 3100 $ 33.00 10320 $ 27.46 $ 181,047.36 $ 102,300.00 $ 283,347.36 04-Nov 5180 $ 27.46 $ 142,222.80 5140 $ 27.46 $ 141, 124.56 9900.00 $ 229,895.44 5140.00 $ 141, 124.56

Periodic Method FIFO Method: Units Date Activity 01-Jan Beginning Inventory 04-Feb Purchase 02-Apr Purchase 17-Jul Purchase No of units Unit cost Total Cost 2980 $ 14.00 $ 41,720.00 3980 $ 22,00 $ 87,560.00 4980 $ 28,00 $ 139,440.00 3100 $ 33.00 $ 102,300.00 Purchases Less : Sales Ending Inventory 15040 -9900 5140 Cost of goods available for sale $ 371,020.00 Less : Ending Inventory 5140 units i 3100 units @ $33 2040 units @ $28 102,300.00 57,120.00 Ending Inventory $ 159,420.00 Cost of Goods sold Cost of goods available for sale - Ending Inventory $ 211,600.00 Note : FIFO Method Assumes that Goods which are purchased first will be sold First, So in Ending inventory units will be there which are purchased last. Periodic Method LIFO Method: Units bate Activity 01-Jan Beginning Inventory 04-Feb Purchase 02-Apr Purchase 17-Jul Purchase No of units Unit cost Total Cost 2980 $ 14.00 $ 41,720.00 3980 $ 22.00 $ 87,560.00 4980 $28.00 $ 139,440.00 3100 $ 33.00 $ 102,300.00 Purchases Less : Sales Ending Inventory 15040 -9900 5140 Cost of goods available for sale $ 371,020.00 Less: Ending Inventory 5140 units : 2980 units e $14 2160 units @ $22 $ $ 41,720.00 47,520.00 Ending Inventory 89,240.00 Cost of Goods sold Cost of goods available for sale - Ending Inventory $ 281,780.00 Note : LIFO Method Assumes that Goods which are purchased last will be sold First, So in Ending inventory units will be there which are purchased first. Periodic Method Average Cost Method: Units Date Activity 01-Jan Beginning Inventory 04-Feb Purchase 02-Apr Purchase 17-Jul Purchase No of units Unit cost Total Cost 2980 $ 14.00 $ 41,720.00 3980 $ 22.00 $ 87,560.00 4980 $28.00 $ 139,440.00 3100 $ 33.00 $ 102,300.00 Purchases Less : Sales Ending Inventory 15040 -9900 5140 $ 371,020.00 Cost of goods available for sale Average Cost per Unit = $371020/15040 units 24.67 Less : Ending Inventory 51 40 units : 5140 units @ $24.67 $ 111,384 Ending Inventory 111,384 Cost of Goods sold Cost of goods available for sale - Ending Inventory 259,636 Note : Avg cost method assumes that goods are sold of avg cost per unit Therefore, Ending inventory will also be valued at avg cost per unit Note : Round off taken upto 2 decimals