Question

FIFO METHOD:

Hurst Company's beginning inventory and purchases during the fiscal year ended December 31, 20X2 were as follows Date Event Units Unit Price Total Cost January 1, 20X2 January 12 February 28 June 29 August 31 October 29 November 30 December 21 bea. Invento 1st purchase 2nd purchase 3rd purchase 4th purhcase 5th purchase 6th purchase 7th purchase 1,50010.00 $ 15,000.00 500 $11.50 5,750.00 600 $14.50 8,700.00 1,200$15.00 18,000.00 800$16.50$ 13,200.00 $5,400.00 700 18.50 12,950.00 400 20.00S8,000,00 $87,000.00 300 6,000 There are 1,200 units of inventory on hand at December 31, 20X2 Required 1) Calculate the total amount to be assigned to the Cost of Goods Sold for the year ending 20X2 and the ending inventory on December 31 under each of the following periodic inventory methods: a) FIFO, b) LIFO, c) Weighted average (round calculations to 2 decimal places) 1a) FIFO method: Cost of Goods Sold xUnit Price Cost of Ending Inventor Date Event Units Total Units x Un x Unit Price Total January 1, 20X2Beg. Inventory

Answer 1

1a) FIFO method:

		Cost of Goods Sold					Cost of Ending Inventory
Date	Event	Units	x	Unit Price	=	Total	Units	x	Unit Price	=	Total
January 1, 20X2	Beg. Inventory	1500		10.00		15000.00
January 12	1st purchase	500		11.50		5750.00
February 28	2nd purchase	600		14.50		8700.00
June 29	3rd purchase	1200		15.00		18000.00
August 31	4th purchase	800		16.50		13200.00
October 29	5th purchase	200		18.00		3600.00	100		18.00		1800.00
Novemeber 30	6th purchase						700		18.50		12950.00
December 21	7th purchase						400		20.00		8000.00
December 31	Total	4800				64250.00	1200				22750.00

b) LIFO method:

		Cost of Goods Sold					Cost of Ending Inventory
Date	Event	Units	x	Unit Price	=	Total	Units	x	Unit Price	=	Total
January 1, 20X2	Beg. Inventory	300		10.00		3000.00	1200		10.00		12000.00
January 12	1st purchase	500		11.50		5750.00
February 28	2nd purchase	600		14.50		8700.00
June 29	3rd purchase	1200		15.00		18000.00
August 31	4th purchase	800		16.50		13200.00
October 29	5th purchase	300		18.00		5400.00
Novemeber 30	6th purchase	700		18.50		12950.00
December 21	7th purchase	400		20.00		8000.00
December 31	Total	4800				75000.00	1200				12000.00

c) Weighted average method:

Weighted average rate = Total cost/Total units = $87000/6000 = $14.50

Cost of Goods Sold = 4800 x $14.50 = $69600.00

Cost of Ending Inventory = 1200 x $14.50 = $17400.00

		Cost of Goods Sold					Cost of Ending Inventory
Date	Event	Units	x	Unit Price	=	Total	Units	x	Unit Price	=	Total
December 31	Total	4800		14.50		69600.00	1200		14.50		17400.00