Question

7. (12 points) Ehlo Company is a multiproduct firm. Presented below is information concerning one of its products, the Hawkeye. DateTransaction Quantity Price/Cost 1/1 Beginning inventory 2,980 $14 2/4 Purchase 3,980 22 2/20 Sale 4,720 4/2 Purchase 4,980 7/17 Purchase 3,100 11/4 Sale 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 (6) Perpetual system, moving-average cost flow to to to to to to

Answer 1

Question + Doo Periodic system, FIFO Cost flow Perpectual system, FIFO Cost flow Periodic system, LIFO Cost flow Perpectual system, LIFO Cost flow Periodic system, Weighted Average Cost flow Perpectual system, Moving Average Cost flow Total cost of Goods Ending Cost of Goods available for sale (A) Inventory (B)| Sold (A-B) 371,020 $ 159,420 $ 211,600 371,020 $ 159,420 $ 211,600 371,020 $ 92,220 $ 278,800 371,020 $ 112,560 $ 258,460 371,020 $ 126,798 244,222 371,020 $ 141,124 $ 229,896 Notes: Goods availabe for sale = Beginning inventory + Purchases Cost of Goods Sold = Goods available for sale - Ending inventory

Working Notes Cost of Goods available for sale Cost per Date Tranasaction Quantity Total cost Unit 1/1 Beninni Beginning inventory 2/4 Purchase 4/2 Purchase 7/17 Purchase Total cost of Goods available for sale 2980 $ 3980 $ 4980 $ 3100 $ 14 22 28 33 $ $ $ $ $ 41,720 87,560 139,440 102,300 371,020 Computation of Closing Inventory in Units : Particulars Beginning Inventory Purchases, 2/4 Purchases, 4/2 Purchases, 7/17 Total No. of Units available for sale Less : Sales, 2/20 Sales, 11/4 Ending Inventory Units 2980 3980 4980 3100 15040 4720 5180 5140

Periodic system, FIFO cost flow Ending Inventory under First in First out( FIFO) Periodic method $ 102,300 Most recent Cost, from purchases, 7/17 (3100* $ 33) Next most recent cost, from the purchases, 4/2 (2040 * $ 28) Ending Inventory $ $ 57,120 159,420

Perpectual system, FIFO cost flow Ending Inventory under First in First out( FIFO) Periodic method Perpectual FIFO Goods Purchased Cost of Goods Sold Cost per # of Units Cost per Cost of Goods Date # of Units Unit Sold Sold 1/1 Inventry Balance # of Cost per Inventory Units Unit Balance 2980S 14.00 $ 41,720.00 2980S 14.00 S 41,720.00 3980 S 22.00 S 87,560.00 2/4 3980 S 22.00 2/20 2980 1740 S S 14.00 22.00 S 41,720.00 S 38,280.00 4/2 4980 S 28.00 2240S 2240S 4980S 2240S 4980S 3100 22.00 S 49,280.00 22.00 S 49,280.00 28.00 $139,440.00 22.00 S 49,280.00 28.00 $139,440.00 33.00 $102,300.00 7/17 3100 S 33.00 S 11/4 2240 2940 S S 22.00 28.00 S 49,280.00 S 82,320.00 2040S 3100 S 5140 28.00 33.00 S 57,120.00 $102,300.00 $159,420.00 Total

c) Ending Inventory under Last in first out(LIFO), Cost Flow $ 44,700 Earliest Cost, from Beginning invenotry, 1/1 (2980*$ 14) Next earliest cost, from purchases, 2/4 (2160 * $ 22) Ending Inventory $ $ 47,520 92,220 d) Perpetual LIFO cost flow Goods Purchased Cost of Goods Sold Cost per # of Units Cost per Cost of Goods Date # of Units Unit Sold Unit Sold 1/1 2/4 3980 S 22.00 Inventry Balance # of Cost per Inventory Units Unit Balance 2980S 14.00 S 41,720.00 2980 S 14.00 S 41,720.00 3980 S 22.00 S 87,560.00 2/20 3980 740 S S 22.00 14.00 S 87,560.00 $ 10,360.00 S 4/2 4980 S 28.00 2240 2240S 4980S 2240S 4980S 3100S 14.00 14.00 28.00 14.00 28.00 33.00 S 31,360.00 S 31,360.00 $139,440.00 S 31,360.00 $139,440.00 $102,300.00 7/17 3100 S 33.00 11/4 3100 2080 S S 33.00 28.00 $102,300.00 S 58,240.00 2240S 2900S 5140 14.00 S 31,360.00 28.00 S 81,200.00 $112,560.00 Total

e) Periodic system, Weighted Average Cost Flow Ending Inventory under Weighted Average cost method Weighted Average cost per unit = Total cost of Goods availabe for sales / Total Units available $ 371020 / 15040 = $ 24.6689 per unit Ending Inventory 5140* $ 24.6689 per unit $ 126,798

Perpectual System ,Moving Average cost Flow Goods Purchased Cost of Goods Sold Date # of Units Cost per # of Units Unit Sold Cost per Cost of Goods Unit | Sold 1/1 2/4 Inventory Balance # of Cost per Inventory Units Unit Balance Sold 2980S 14.00 S 41,720 2980S 14.00 S 41,720 3980 S 22.00 S 87,560 6960 S 18.5747S 129,280 2240 S 18.5747 | S 41,607 3980 S 22.00 2/20 4720 S 18.5747 S 87,673 4/2 4980 S 28.00 2240S 18.5747S 41,607 4980S 28.00 S 139,440 7220 S 25.0758 S 181,047 3100 S 33.00 7220 S 25.0758 S 3100 S 33.00 S 10320 S 27.4561 S 5140 $ 27.4561 $ 181,047 102,300 283,347 141,124 11/4 5180 $ 27.4561 $ 142,223