Ferris Company began 2018 with 4,000 units of its principal
product. The cost of each unit is $7. Merchandise transactions for
the month of January 2018 are as follows:
Purchases | |||||||||
Date of Purchase | Units | Unit Cost* | Total Cost | ||||||
Jan. 10 | 3,000 | $ | 8 | $ | 24,000 | ||||
Jan. 18 | 4,000 | 9 | 36,000 | ||||||
Totals | 7,000 | 60,000 | |||||||
*Includes purchase price and cost of freight.
Sales | ||
Date of Sale | Units | |
Jan. 5 | 2,000 | |
Jan. 12 | 1,000 | |
Jan. 20 | 3,000 | |
Total | 6,000 | |
5,000 units were on hand at the end of the month.
Required:
Calculate January's ending inventory and cost of goods sold for the
month using each of the following alternatives:
1. FIFO, periodic system.
2. LIFO, periodic system.
3. LIFO, perpetual system.
4. Average cost, periodic system.
5. Average cost, perpetual system.
Ferris company | |||||||||
In periodic inventory, dates are not considered for calculating cost of each sale, instead cost of goods sold is calculated at the end of period | |||||||||
Total units sold are =6000 | |||||||||
FIFO ( periodic ) | |||||||||
Cost of goods available for sale | COGS | Ending Inventory | |||||||
Date | No. of units | cost p.u | Cost of goods available for sale | No. of units | cost p.u | COGS | No. of units | cost p.u | Ending inventory |
beg. Inv. | 4000 | 7 | 28000 | 4000 | 7 | 28000 | |||
Purchases | 3000 | 8 | 24000 | 2000 | 8 | 16000 | 1000 | 8 | 8000 |
4000 | 9 | 36000 | 4000 | 9 | 36000 | ||||
11000 | 88000 | 6000 | 44000 | 5000 | 44000 | ||||
LIFO ( periodic ) | |||||||||
Cost of goods available for sale | COGS | Ending Inventory | |||||||
Date | No. of units | cost p.u | Cost of goods available for sale | No. of units | cost p.u | COGS | No. of units | cost p.u | Ending inventory |
beg. Inv. | 4000 | 7 | 28000 | 4000 | 7 | 28000 | |||
Purchases | 3000 | 8 | 24000 | 2000 | 8 | 16000 | 1000 | 8 | 8000 |
4000 | 9 | 36000 | 4000 | 9 | 36000 | ||||
11000 | 88000 | 6000 | 52000 | 5000 | 36000 | ||||
Weighted average cost( periodic ) | |||||||||
Cost of goods available for sale | COGS | Ending Inventory | |||||||
Date | No. of units | cost p.u | Cost of goods available for sale | No. of units | cost p.u | COGS | No. of units | cost p.u | Ending inventory |
beg. Inv. | 4000 | 28000 | |||||||
Purchases | 3000 | 24000 | |||||||
4000 | 36000 | ||||||||
11000 | 8 | 88000 | 6000 | 8 | 48000 | 5000 | 8 | 40000 | |
LIFO ( perpetual ) | |||||||||
Cost of goods available for sale | COGS | Ending Inventory | |||||||
Date | No. of units | cost p.u | Cost of goods available for sale | No. of units | cost p.u | COGS | No. of units | cost p.u | Ending inventory |
beg. Inv. | 4000 | 7 | 28000 | 4000 | 7 | 28000 | |||
Sales | 2000 | 7 | 14000 | 2000 | 7 | 14000 | |||
Purchases | 3000 | 8 | 24000 | 2000 | 7 | 14000 | |||
3000 | 8 | 24000 | |||||||
Sales | 1000 | 8 | 8000 | 2000 | 7 | 14000 | |||
2000 | 8 | 16000 | |||||||
Purchases | 4000 | 9 | 36000 | 2000 | 7 | 14000 | |||
2000 | 8 | 16000 | |||||||
4000 | 9 | 36000 | |||||||
Sales | 3000 | 9 | 27000 | 2000 | 7 | 14000 | |||
2000 | 8 | 16000 | |||||||
1000 | 9 | 9000 | |||||||
11000 | 88000 | 6000 | 49000 | 5000 | 39000 | ||||
Moving average( perpetual ) | |||||||||
Cost of goods available for sale | COGS | Ending Inventory | |||||||
Date | No. of units | cost p.u | Cost of goods available for sale | No. of units | cost p.u | COGS | No. of units | cost p.u | Ending inventory |
beg. Inv. | 4000 | 7 | 28000 | 4000 | 7 | 28000 | |||
Sales | 2000 | 7 | 14000 | 2000 | 7 | 14000 | |||
Purchases | 3000 | 8 | 24000 | 5000 | 7.6 | 38000 | |||
Sales | 1000 | 7.6 | 7600 | 4000 | 7.6 | 30400 | |||
Purchases | 4000 | 9 | 36000 | 8000 | 8.3 | 66400 | |||
Sales | 3000 | 8.3 | 24900 | 5000 | 8.3 | 41500 | |||
11000 | 88000 | 6000 | 46500 | 5000 | 41500 | ||||
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