Question

Purchases - Units and Unit Costs Sales - Total Units October 1 Balance 100 @ 5.00 October 300 400 300 @ @ 5.10 5.30 200 @ 5.35 600 @ 5.60 200 @ 5.80 Instructions (a)Determine the inventory at October 30 on each of the following bases and Cost of Goods Sold. Assume that periodic (without withdrawal) inventory records are kept in dollars, Carry unit costs to the nearest cent. (1) FIFO (2)LIFO (3)Average (b) If the perpetual inventory record is kept in dollars, and costs are computed at the time of each withdrawal (perpetual), what amount would be shown as ending inventory and Cost of Goods Sold in (1) and (2)? (1)FIFO (2)LIFO

Answer 1

(a) Periodic

FIFO		Cost of Goods Available for sale			Cost of Goods Sold			Ending Inventory
		No of Units	Cost per unit	Cost of Goods Available for sale	No of Units	Cost per unit	Cost of Goods Sold	No of units	Cost per unit	Ending Inventory
Oct-01	Beginning Inventory	100	$               5.00	$                     500	100	$       5.00	$              500
Oct-04	Purchase	400	$               5.10	$                 2,040	400	$       5.10	$          2,040
Oct-11	Purchase	300	$               5.30	$                 1,590	300	$       5.30	$          1,590
Oct-18	Purchase	200	$               5.35	$                 1,070	200	$       5.35	$          1,070
Oct-26	Purchase	600	$               5.60	$                 3,360	450	$       5.60	$          2,520	150	$       5.60	$            840
Oct-30	Purchase	200	$               5.80	$                 1,160				200	$       5.80	$         1,160
	Total	1800		$                 9,720	1450		$          7,720	350		$         2,000

LIFO		Cost of Goods Available for sale			Cost of Goods Sold			Ending Inventory
		No of Units	Cost per unit	Cost of Goods Available for sale	No of Units	Cost per unit	Cost of Goods Sold	No of units	Cost per unit	Ending Inventory
Oct-01	Beginning Inventory	100	$               5.00	$                     500				100	$       5.00	$            500
Oct-04	Purchase	400	$               5.10	$                 2,040	150	$       5.10	$              765	250	$       5.10	$         1,275
Oct-11	Purchase	300	$               5.30	$                 1,590	300	$       5.30	$          1,590
Oct-18	Purchase	200	$               5.35	$                 1,070	200	$       5.35	$          1,070
Oct-26	Purchase	600	$               5.60	$                 3,360	600	$       5.60	$          3,360
Oct-30	Purchase	200	$               5.80	$                 1,160	200	$       5.80	$          1,160
	Total	1800		$                 9,720	1450		$          7,945	350		$         1,775

Average
Average Cost per unit = $9720 / 1800 = $5.40 per unit
Ending Inventory = 350 x $5.40 = $1890
Cost of Goods Sold = 1450 x $5.40 = $7830

(b) Perpetual

FIFO Cost of Goods Available for sale Cost of Goods Sold Ending Inventory No of units Cost per unit cost of Goods Sold Ending Cost of Goods No of Units cost per unit Available for sale 100 $ 5.00 $ 500 400 $ 5.10 $ 2,040 Oct-01 Beginning Inventory Oct-04 Purchase No of Cost per units 100 $ 5.00 100 $ 5.00 400 $ 5.10 $ $ $ 500 500 2,040 Anlc 10 Oct-05 Sales 100 $ 200 $ 5.00 $ 5.10 $ 500 1,020 Oct-11 Purchase 300 $ 5.30 $ 1,590 200 $ 5.10 $ 1,020 Oct-12 Sales Oct-18 Purchase 200 $ 5.35 $ 1,070 200 $ 200 $ 300 $ 300 $ 300 $ 200 $ 300 $ 200 $ 600 $ 5.10 $ 5.10 $ 5.30 $ 5.30 $ 5.30 $ 5.35 $ 5.30 $ 5.35 $ 5.60 $ 1,020 1,020 1,590 1,590 1,590 1,070 1,590 1,070 3,360 Oct-26 Purchase 600 $ 5.60 $ 3,360 Oct-27 Sales 300 $ 200 $ 300 $ 150 $ 5.30 $ 5.35 $ 5.60 $ 5.60 $ 1,590 1,070 1,680 840 Oct-28 Sales Oct-30 Purchase 200 $ 5.80 $ 1,160 300 $ 150 $ 150 $ 200 $ 350 5.60 $ 5.60 $ 5.60 $ 5.80 $ $ 1,680 840 840 1,160 2,000 Total 1800 $ 9,720 1450 $ 7,720

(c) For Gross profit Sales price not given

LIFO Oct-01 Beginning Inventory Oct-04 Purchase Oct-05 Sales Oct-11 Purchase Oct-12 Sales 500 Oct-18 Purchase Cost of Goods Available for sale Cost of Goods Sold Ending Inventory Cost of Goods No of Cost per Cost of No of Cost per TE Cost per Ending No of Units Cost per unit Available for sale Units unit Goods Sold units unit Inventory 100 $ 5.00 $ 500 100 $ 5.00 $ 500 400 $ 5.10 $ 2,040 100 $ 5.00 $ 500 400 $ 5.10 $ 2,040 300 $ 5.10 $ 1,530 100 $ 5.00 $ 500 100 $ 5.10 $ 510 300 $ 5.30 $ 1,590 100 $ 5.00 $ 500 100 $ 5.10 $ 510 300 $ 5.30 $ 1,590 200 $ 5.30 $ 1,060 100 $ 5.00 $ 100 $ 5.10 $ 100 $ 5.30 $ 2001 $ 5.35 $ 1,070 100 $ 5.00 $ 500 100 $ 5.10 $ 51 100 $ 5.30 $ 530 200 $ 5.35 $ 1,070 600 $ 5.60 $ 3,360 100 $ 5.00 $ 500 100 $ 5.10 $ 510 100 $ 5.30 $ 530 200 $ 5.35 $ 1,070 600 $ 5.60 $ 3,360 600 $ 5.60$ 3,360 100 $ 5.00 $ 200 $ 5.35 $ 1,070 100 $ 5.10 $ 510 100 $ 5.30 $ 530 100 $ 5.30 $ 530 100 $ 5.00 $ 500 50 $ 5.10 $ 255 50 $ 5.10 $ 200 $ 5.80 $ 1,160 100 $ 5.00 $ 500 50 $ 5.10 $ 255 200 $ 5.80 $ 1,160 1800 $ 9,720 1450 $ 7,805 350 $ 1,915 Oct-26 Purchase Oct-27 Sales Oct-28 Sales Oct-30 Purchase Total

Gross Profit = Sales revenue - cost of goods sold