Question

Ferris Company began January with 7,000 units of its principal product. The cost of each unit is $6. Merchandise transactions for the month of January are as follows:

	Purchases
Date of Purchase	Units		Unit Cost*			Total Cost
Jan. 10	6,000		$	7			$	42,000
Jan. 18	7,000			8				56,000
Totals	13,000							98,000

* Includes purchase price and cost of freight.

Sales
Date of Sale	Units
Jan. 5	3,000
Jan. 12	1,000
Jan. 20	4,000
Total	8,000

12,000 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.

Answer 1

Date of Purchase	Units	Units cost	Total Cost	Unit Price
In Stock	7000	6	42000	6
10-Jan	6000	7	42000	6.461538
18-Jan	7000	8	56000	7
Perpetual Fifo or periodic fifo both are same. Only differnce is in perpetual system, the inventory is constantly updated but in periodic system at the year end the updations is done
Sales date	Units	Units Sold from	Units cost	Total Cost
5-Jan	3000	1.Openeing Stock	6	18000
12-Jan	1000	1.Openeing Stock	6	6000
20-Jan	4000	1. Openeing Stock-3000 2. 10Jan purchases	3000 units @6 1000 units @7	25000
			Total Cost of goods sold	49000
			Closing Stock 5000 units @7 7000 units @ 8	91000
LIFO
Sales date	Units	Units Sold from	Units cost	Total Cost
5-Jan	3000	1.Openeing Stock	6	18000
12-Jan	1000	1.10 Jan purchase	7	7000
20-Jan	4000	1.10 Jan purchase	7	28000
			Total Cost of goods sold	53000
			Closing Stock 4000 units @6 1000 units @ 7 7000 units @ 8	87000
Perpetual Average method
Sales date	Units	Units Sold from	Units cost	Total Cost	Formula
5-Jan	3000	Opening Stock	6	18000
12-Jan	1000	Total Available stock as on date	6.6	6600	(4000*6+6000*7)/10000
20-Jan	4000	Total Available stock as on date	7.2125	28850	(9000*6.6+7000*8)/16000
			Total Cost of goods sold	53450
			Total value of closing stock 12000 units @ 7.2125	86550
Periodic Average weighted
Date of Purchase	Units	Units cost	Total Cost
In Stock	7000	6	42000
10-Jan	6000	7	42000
18-Jan	7000	8	56000
Total	20000		140000
	Unit price	7
	Total number of goods sold	8000
	Total Cost of goods sold	56000
	Closing stock 12000@7	84000