Question

Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021: Aug.1 Inventory on hand–3,400 units; cost $6.70 each. 8 Purchased 17,000 units for $6.90 each. 14 Sold 13,600 units for $13.40 each. 18 Purchased 10, 200 units for $7.00 each. 25 Sold 12,600 units for $12.40 each. 28 Purchased 5,400 units for $5.80 each. 31 Inventory on hand-9,800 units. Required: Using calculations based on a periodic inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using each of the following cost flow methods.

Answer 1

Average cost	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	# of units	Unit cost	Total	# of units	Unit cost	Total	# of units	Unit cost	Total
Beginning inventory	3400	6.70	22780
Purchases:
August 8	17000	6.90	117300
August 18	10200	7.00	71400
August 28	5400	5.80	31320
Total	36000	6.74	242800	26200	6.74	176588	9800	6.74	66052
Workings:
Average cost	6.74	=242800/36000