Jackie wild makes the following purchases of inventory during May, her first mon
ID: 2373396 • Letter: J
Question
Jackie wild makes the following purchases of inventory during May, her first month of operations:
May2 10 units $6.00 cost per unit
May15 20units $8.25 cost per unit
May22 15units $9.50 cost per unit
Wild sells 15 unites $20 each on May 19. Wild uses a perpetual inventory system. Determine the cost of goods sold and gross profit for the May19 sales and the ending inventory balance (per general ledger)on May31, using(a)FIFO, and (b)weighted average:
COGS Gross profit Ending inventory
(a) FIFO ________ __________ ______________
(b) Weighted average __________ ____________ _______________
Explanation / Answer
if FIFO, for may 19 sell, 10 units are sold from may 2 and 5 units are sold from may 15
cogs = 10 * 6 + 5 * 8.25 = 101.25
profit = 15 * 20 - 101.25 = 198.75
ending inventory = (20-5) * 8.25 = 123.5
weighted average
cost of each unit = (10 * 6 + 20 * 8.25)/30 = 225/30 = 7.5
cogs = 15 * 7.5 = 112.5
profit = 300 - 112.5 = 187.5
ending inventory = (20-5) * 7.5 = 112.5
.................................COGS..........................Gross profit.................endding
inventory
FIFO...................... 101.25................................198.75......................123.5
weighted...............112.5..................................187.5.........................112.5
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.