Question

Question 5 Splish Brothers Inc. began operations on July 1. It uses a perpetual inventory system. During July, the company had the following purchases and sales. Purchases Date Units Unit Cost Sales Units $118 13 July 1 10 July 6 $126 6 July 11 6 July 14 $136 July 21 July 27 6 X Your answer is incorrect. Try again. Calculate average cost for each unit. (For calculation and answers purpose round unit costs to 2 decimal places, e.g. 15.25.) July 1 July 6 July 11 July 14 July 21 July 27 Determine the ending inventory under a perpetual inventory system using (1) FIFO, (2) moving-a unit costs to 2 decimal places, e.g. 15.25 and ending inventory values to 0 decimal places, e.g. 515.) and (3) LIFO. (For calculation and answers purpose round FIFO MOVING-AVERAGE LIFO The ending inventory under a perpetual inventory system

Answer 1

Solution Required 1:Calculate average cost for each unit July 1 July 6 July 11 July 14 July 21 July 27 S 118.00 S 118.00 123.33 123.33 S 132.55 S 132.55 Required 2 : Determine the ending inventory under a perpetual inventory system using (1) FIFO, (2) moving-average, and (3) LIFO. MOVING FIFO AVERAGE LIFO The ending inventory under a perpetual inventory system S S $ 680 663 626 First-in, first-out (FIFO) Method Purchases Cost of Goods sold Inventory on Hand Date Unit Cost Total cost Quantity Total cost Quantity Quantity Unit Cost Total cost Unit Cost July 1 July 6 118.00 S 118.00 S 1,534 S 13 13 1,534 118.00 S $ S 10 1,180 118.00 354 July 11 126.00 S S S 118.00 S 756 354 S S 6 126.00 756 July 14 3 S 118.00 S 126.00 S 354 378 126.00 S S 378 136.00 S July 21 S 126.00 S 8 1,088 378 S 136.00 1,088 July 27 3 $ 136.00 S 126.00 S 378 680 S S 136.00 408 Totals $ S 27 3,378 22 2,698 680 First-in, first-out (FIFO) Method Ending inventory 680 cost of goods sold 2,698 LD

Moving- average Method Purchases Cost of Goods sold Inventory on Hand Date Unit Cost Total cost Quantity 13 S Unit Cost Total cost Quantity Quantity 13 S Unit Cost Total cost July 1 July 6 118.00 S 118.00 S 1,534 1,534 118.00 S 118.00 $ 123.33 S 10 1,180 354 July 11 July 14 July 21 July 27 6 S S 126.00 756 9 1,110 S S 6 123.33 740 123.33 370 136.00 S S S S 8 1,088 11 132,55 1,458 132.55 S S S 6 132.55 795 663 Totals $ S 27 3,378 22 2,715 5 663 Moving average Method Ending inventory 663 cost of goods sold 2,715 Last-in, first-out (LIFO) Method Purchases Cost of Goods sold Inventory on Hand Date Unit Cost Total cost Quantity Total cost Quantity Quantity Unit Cost Total cost Unit Cost July 1 July 6 118.00 S 118.00 S 1,534 S 13 13 1,534 118.00 S $ 1,180 S 10 118.00 354 July 11 126.00 S S 118.00 S 756 354 S 126.00 S 6 756 July 14 July 21 118.00 S S 6 126.00 756 354 118.00 S 136.00 S 1,088 3S 8 354 S S 136,00 1,088 July 27 6 S 136.00 816 118.00 354 S 136.00 272 Totals S S 27 3,378 22 2,752 5 626 Last-in, first-out (LIFO) Method Ending inventory S 626 cost of goods sold S 2,752 LD co.