Question

The following data are available for Sellco for the fiscal year ended on January 31, 2017:

Sales	820	units
Beginning inventory	270	units	@	$	4
Purchases, in chronological order	320	units	@	$	5
	400	units	@	$	6
	220	units	@	$	8

Required:

a. Calculate cost of goods sold and ending inventory under the cost flow assumptions, FIFO, LIFO and Weighted average (using a periodic inventory system): (Round unit cost to 2 decimal places.)

	Cost of Goods Sold	Ending Inventory
FIFO
LIFO
Weighted average

b. Assume that net income using the weighted-average cost flow assumption is $14,300. Calculate net income under FIFO and LIFO. (Round unit cost to 2 decimal places.)

	Net Income
FIFO
LIFO

Answer 1

	Cost of goods sold	Ending Inventory
FIFO	$                 4,060.00	$               2,780.00
LIFO	$                 5,160.00	$               1,680.00
Weighted Average	$                 4,635.37	$               2,203.50

Particulars	Units	Rate	Amount
Beginning inventory	270	4	1080
Purchases, in chronological order	320	5	1600
	400	6	2400
	220	8	1760
Cost of goods available for sale	1210		6840
Ending inventory units = 270 + 940 - 820 = 390 units

FIFO
Particulars	Qty	Rate	Amount
Beginning inventory	270	4	1080
Purchases, in chronological order	320	5	1600
	230	6	1380
Cost of goods sold	820		4060
	Units	Amount
Cost of goods available for sale	1210	6840
Less:Cost of goods sold	820	4060
Ending Inventory	390	2780

LIFO
Particulars	Qty	Rate	Amount
Purchases	220	8	1760
	400	6	2400
	200	5	1000
Cost of goods sold	820		5160
	Units	Amount
Cost of goods available for sale	1210	6840
Less:Cost of goods sold	820	5160
Ending Inventory	390	1680

Weighted Average
Particulars	Amount
Weighted Average Rate (6840/1210)	5.65
Cost of goods sold(820 units x 5.65)	4635.37
Ending Inventory (390 units x 5.65)	2203.50