The units of an item available or sale during the year were as follows jan 1 inv

Question

The units of an item available or sale during the year were as follows jan 1 inventory 27 units at 600 Feb 4 purchase 54 units at 690 aug 21 purchase 63 units at 780 Oct 23 purchase 56 units at 825 Use the information in this exercise, but assume an April 12th sale of 70 units, a September 10th sale of 70 units, and that there were 60 units in the December 31st physical inventory. Use the perpetual inventory method. -How much is cost of goods sold for the year under FIFO, LIFO and Moving Average? -What is the cost of ending inventory on December 31st under FIFO, LIFO and Moving Average? (please Show supporting calculations.)

Explanation / Answer

Calculate goods available for sale: 47 x 40 = 1880 31 x 42 = 1302 27 x 43 = 1161 Total 105 units = 3182 Calculate total sales: 40 x 62 = 2480 30 x 63 = 1890 14 x 64 = 896 Total 84 units = 5266 Valuation of inventory FIFO 21 units x 43 = 903 Gross profit 5266 - (3182-903) = 2987 LIFO Basis Valuation of inventories 7 x 40 = 280 1 x 42 = 42 13 x 43 = 559 Total = 881 Gross profit 5266 - (3182-881) = 1203

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