Question

Periodic inventory by three methods; cost of goods sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory 50 units at $124 Mar. 10 Purchase 50 units at $134 Aug. 30 Purchase 30 units at $142 Dec. 12 Purchase 70 units at $146 There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the ending inventory cost and the cost of goods sold by three methods. Round interim calculations to one decimal and nearest whole dollar. Cost of Ending Inventory and Cost of Goods Sold Inventory Method E nding Inventory Cost of Goods Sold First-in, first-out (FIFO) $ 11,640 15,740 Last-in, first-out (LIFO) 10,220 17,160 Weighted average cost 3,920 X 2 .4 X

Answer 1

FIFO method , earlier balance and purchase will be out

Units available for sale	Units sold	Cost of Goods sold	Remaining ending inventory units	Cost of ending inventory
50 units @ 124	50 units @ 124	6200
50 units @ 134	50 units @ 134	6700
30 units @ 142	20 units @ 142	2840	10 units @ 142	1420
70 units @ 146			70 units @ 146	10220
Total		15740		11640

Weighted average cost

Units available	Good available for sale
50 units @ 124	6200
50 units @ 134	6700
30 units @ 142	4260
70 units @ 146	10220
Total = 200 units	27380

Cost per unit = goods available for sale / total units = 27380/200= 136.9

Cost of ending inventory= units available at end of month × cost per unit= 80 × 136.9 = 10952

Units sold = available units for sale - ending inventory = 200-80= 120

Cost of goods sold = units sold × cost per unit = 120 × 136.9= 16428

LIFO method, latest purchases will be out

Units available for sale	Units sold	Cost of Goods sold	Remaining ending inventory units	Cost of ending inventory
50 units @ 124	50 units @ 124		50 units @ 124	6200
50 units @ 134	20 units @ 134	2680	30 units @ 134	4020
30 units @ 142	30 units @ 142	4260
70 units @ 146	70 units @ 146	10220
Total		17160		10220