Question

Please answer part a, b, c, and d.

JJim's Mulch Co. buys mulch and resells it directly to consumers. Due to the nature of their inventory, they employ the last-in first-out (LIFO) method. At the beginning of the year, Jim's Mulch Co. had 62 bags of mulch which had been purchased at $2 per bag. In April. Jim's Mulch Co. bought 50 bags for $5 per bag. In September, Jim's Mulch Co. sold 82 bags of mulch for $12 per bag. In December, Jim's Mulch Co. bought 26 bags of mulch for $8 per bag. What is the cost of goods sold by Jim's Mulch Co. during the year? Your Answer: Answer

Answer 1

a) The cost of goods sold during the year : $314 Workings: Cost of goods sold (LIFO Method): Date Items Quantity (bags) Unit Cost 50 April January Purchase Beginning Inventory $5 $2 Total cost $250 $64 $314 82 b) The value of inventoryat the End of the year : | $1,755.50 Workings: Date Items Quantity (baseballs) Unit Cost Total cost January June Balance Beginning Inventory Purchase September Sale Balance December Purchase Balance (End of the year) 201 $1.40 $281.40 331 $2.20 $728.20 532 $1.90 $1,009.60 ($1,009.60 / 532) 400 $1.90 $759.10 132 $1.90 $250.50 430 $3.50 $1,505.00 $3.12 $1,755.50 ($1.755.50 / 562) 562 c) The cost of goods sold during the year: $3,852 Workings: Cost of goods sold (FIFO Method): Date Items Unit Cost Total cost January March Beginning Inventory Purchase Quantity (Toys) 340 472 812 $3 $6 S1.020 $2.832 $3.852 d) The cost of goods sold during the year : | $2,100 Workings: Cost of goods sold (Specific identification method): Items Total cost Paintings of Nashville costing $1,100 Paintings of Sloth costing $1,000 $2.100