In its first month of operations, Literacy for the Illiterate opened a new books
ID: 2355523 • Letter: I
Question
In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought merchandise in the following order: (1) 299 units at $7 on January 1, (2) 399 units at $8 on January 8, and (3) 599 units at $9 on January 29. Assume 760 units are on hand at the end of the month.
Calculate the cost of goods available for sale, ending inventory, and cost of goods sold under the (a) FIFO, (b) LIFO, and (c) weighted average cost flow assumptions. Assume a periodic inventory system is used. (Input all amounts as positive values. Round Weighted average cost per unit to 2 decimal places. Round your final answers to the nearest dollar amount. Omit $ sign in your response.)
Required:Calculate the cost of goods available for sale, ending inventory, and cost of goods sold under the (a) FIFO, (b) LIFO, and (c) weighted average cost flow assumptions. Assume a periodic inventory system is used. (Input all amounts as positive values. Round Weighted average cost per unit to 2 decimal places. Round your final answers to the nearest dollar amount. Omit $ sign in your response.)
Explanation / Answer
(1) 299 units at $7 on January 1 = 299*7 = $2,093 (2) 399 units at $8 on January 8 = 399*8 = $3,192 (3) 599 units at $9 on January 29 =599*9 = $5,391 So Total Cost =Goods available for Sale = $10,676 ....Ans (Row 1) Same for FIFO, LIFO & Wtd Avge Wtd Avge : Total Cost = $10,676 Total Unit = 299+399+599 = 1297 SO Wgtd avge cost pu = $10,676/1297 = $8.23 No of units sold = 1297-760 = 537 So COGS (Wtd Avge) = $8.23* 537 = $4,420 ...Ans Ending Inv (Wtd Avge) = 760*$8.23 = $6,256 ....Ans LIFO : No of units sold = 1297-760 = 537 So COGS = 537*$9 = $4,833 ...Ans Ending Inv = 299*7+399*8 + 62*9 = $5,843 ...Ans FIFO: No of units sold = 1297-760 = 537 So COGS =299*7+ 238*8 = $3,997 ...Ans Ending Inv = 161*$8 + 599*9 = $6,679 ...Ans
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