Gladstone Company tracks the number of units purchased and sold throughout each

Question

Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31 Transactions Units Unit Cost 1,700 $45 Beginning inventory, January 1 Transactions during the year: a. Purchase, January 30 b. Sale, March 14 ($100 each) c. Purchase, May 1 d. Sale, August 31 ($100 each) 3,800 (2,100) 2,500 (2,600) 56 75 Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May Required 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Amount of Goods Available for Sale Ending Inventory Cost of Goods Sold a. Last-in, first-out b. Weighted average cost c. First-in, first-out d. Specific identification

Explanation / Answer

Amount of Goods Ending inventory Cost of goods Available for sale sale a. Last in ,first out 476800 166100 310700 b. Weighted average cost 476800 196680 280120 c. First in ,first out 476800 232300 244500 d. Specific Identification 476800 218620 258180 Beginning inventory 1700 45 76500 purchase , jan 30 3,800 56 212800 purchase ,May 1 2,500 75 187500 goods available 8000 476800 1) Weighted average cost per unit 476,800/8000 59.6 ending inventory = (8000-4,700)*59.60 196680 cost of goods sold = 4700*59.60 = 280120 2) First in first out cost of goods sold = 1700*45 +3000*56 244500 3) Last in first out cost of goods sold = 2500*75 +2200*56 310700 4) Specific Idenfication Beginning inventory 1700 45 76500 purchase , jan 30 2,280 56 127680 purchase ,May 1 720 75 54000 goods available 4700 258180

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