Question

Ferris Company began January with 9,000 units of its principal product. The cost of each unit is $8. Merchandise transactions for the month of January are as follows:

	Purchases
Date of Purchase	Units		Unit Cost*			Total Cost
Jan. 10	6,000		$	9			$	54,000
Jan. 18	9,000			10				90,000
Totals	15,000							144,000

* Includes purchase price and cost of freight.

Sales
Date of Sale	Units
Jan. 5	5,000
Jan. 12	3,000
Jan. 20	6,000
Total	14,000

10,000 units were on hand at the end of the month.

Required:
1. Calculate January's ending inventory and cost of goods sold for the month using FIFO, periodic system.

2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.

3. Calculate January's ending inventory and cost of goods sold for the month using FIFO, perpetual system.

4. Calculate January's ending inventory and cost of goods sold for the month using Average cost, periodic system.

5. Calculate January's ending inventory and cost of goods sold for the month using Average cost, perpetual system. (Round average cost per unit to 4 decimal places. Enter sales with a negative sign.)

Answer 1

Pictures have been uploaded for first three parts. Please refer to a brief description of the answers below:

1. FIFO calculates inventory at the price of the latest lot of goods.

Closing inventory = 9000*10 + 1000*9 = $ 99,000

COGS = Opening inventory + Purchases - Closing Inventory = 72000 + 144000 - 99000 = $ 117,000

2. LIFO calculates inventory at the price of the oldest lot.

Closing Inventory = 9000*8 + 1000*9 = $ 81,000

COGS = 72000 + 144000 - 81000 = $ 135,000

3. The 3rd part is solved in an easy table format. In case it is not understandable, please leave a comment to make me aware of it.

4. Units available for sale = Opening Inventory + Purchases = 9000+15000 = 24,000 units

Value of goods available for sale = 72,000+144,000 = $ 216,000

Average cost = Total value / units = 216,000/24,000 = $ 9

Closing Inventory = 10,000*9 = $ 90,000

COGS = 72000+144000-90000 = $ 126,000

5. Closing Inventory = 10,000*9.3875 = $ 93,875

COGS = $ 122,125

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SPP PERPETUAL SYSTEM DATE PAGE FIFO method Date Reststs Balance Tan Jan 5 9000 7 000 5000 4ou0 39000 G000 SYOO0 4000 32000 6000 54000 Tan 18 3000 ayouo 1o00 8O00 GO00 5YOOD Tan 18 9000 90,000 10 SOO0 6000 54000 9000 10 40000 40,000 4000 g000 000 5000 45000 9000 40,000 10 Jotal 10,000 $9,000 uniti ending smuurtery $99,000 10,000 unit Jeods sold Jotal aicue column ラ$ 400