Question

Cost Flow Methods The following three identical units of Item K113 are purchased during April: Units Cost April 2 Purchase 1 $137 April 15 Purchase 139 April 20 Purchase 141 Total $417 Average cost per unit $139 ($417 = 3 units) Assume that one unit is sold on April 27 for $174. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost method. Gross Profit Ending Inventory 44 a. First-in, first-out (FIFO) b. Last-in, first-out (LIFO) 44 4 c. Weighted average cost 44 4

Answer 1

Periodic : FIFO Cost of Goods Sold Goods Purchasd Inventory Balance cost of Goods Available for Ending #of Units Cost Per Cost of # of Cost Per Goods Sold Units #of Units Unit Unit sales sold Cost Per Unit Inventory Apr-02 137 1 137 137 1 137 137 0 0 139 Apr-15 1 139 139 0 0 1 139 139 Apr-20 1 141 141 0 141 0 1 141 141 Totals Periodic: LIFO 33 417 1 137 2 280 Goods Purchasd Cost of Goods Sold Inventory Balance cost of Goods Available for Ending # of Units Cost Per # of Goods Sold Units Cost of Cost Per Cost Per Unit sales sold # of Units Unit Unit Inventory Apr-02 Apr-15 137 1 137 137 0 137 0 1 137 139 1 139 139 0 1 139 139 Apr-20 1 141 141 1 141 141 0 141 0 Totals 417 1 141 2 276

Perio dic : Weighted Average Goods Purchasd Cost of Goods Sold Inventory Balan ce cost of Goods # of #of Ending Inventory Cost Per Cost of Cost Per Cost Per Unit Available forUnits sales #of Units Unit Goods Sold Units Unit sold Apr-02 1 Apr-15 1 Apr-20 1 137 137 139 139 141 141 Totals 417 33 139.00 1 139.00 139 2 139.00 278 Answers Ending ivnetory Gross Profit FIFO 37 280 LIFO 276 33 Weighted Average 35 278 Gross Profit Selling Price Cost of goods sold FIFO 174-137 37 LIFO 174-141 33 Average = 174-139 35