Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an it
ID: 2404512 • Letter: P
Question
Periodic Inventory by Three Methods; Cost of Merchandise Sold
The units of an item available for sale during the year were as follows:
There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used.
Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.
Jan. 1 Inventory 30 units @ $104 Mar. 10 Purchase 70 units @ $116 Aug. 30 Purchase 30 units @ $124 Dec. 12 Purchase 70 units @ $130Explanation / Answer
Answers
FIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
30
$ 104.00
$ 3,120.00
30
$ 104.00
$ 3,120.00
0
$ 104.00
$ -
Purchases:
10-Mar
70
$ 116.00
$ 8,120.00
70
$ 116.00
$ 8,120.00
0
$ 116.00
$ -
30-Aug
30
$ 124.00
$ 3,720.00
20
$ 124.00
$ 2,480.00
10
$ 124.00
$ 1,240.00
12-Dec
70
$ 130.00
$ 9,100.00
$ 130.00
$ -
70
$ 130.00
$ 9,100.00
TOTAL
200
$ 24,060.00
120
$ 13,720.00
80
$ 10,340.00
LIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
30
$ 104.00
$ 3,120.00
0
$ 104.00
$ -
30
$ 104.00
$ 3,120.00
Purchases:
0
$ -
$ -
10-Mar
70
$ 116.00
$ 8,120.00
20
$ 116.00
$ 2,320.00
50
$ 116.00
$ 5,800.00
30-Aug
30
$ 124.00
$ 3,720.00
30
$ 124.00
$ 3,720.00
0
$ 124.00
$ -
12-Dec
70
$ 130.00
$ 9,100.00
70
$ 130.00
$ 9,100.00
0
$ 130.00
$ -
TOTAL
200
$ 24,060.00
120
$ 15,140.00
80
$ 8,920.00
Weighted Average Method
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
30
$ 104.00
$ 3,120.00
120
$ 120.30
$ 14,436.00
80
$ 120.30
$ 9,624.00
Purchases:
0
$ -
$ -
10-Mar
70
$ 116.00
$ 8,120.00
30-Aug
30
$ 124.00
$ 3,720.00
12-Dec
70
$ 130.00
$ 9,100.00
TOTAL
200
$ 120.30 [24060 / 200]
$ 24,060.00
Cost of Merchandise Inventory and Cost of Merchandise Sold
Inventory Method
Merchandise Inventory
Merchandise Sold
First-in, first-out (FIFO)
$ 10,340.00
$ 13,720.00
Last-in, first-out (LIFO)
$ 8,920.00
$ 15,140.00
Weighted average cost
$ 9,624.00
$ 14,436.00
FIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
30
$ 104.00
$ 3,120.00
30
$ 104.00
$ 3,120.00
0
$ 104.00
$ -
Purchases:
10-Mar
70
$ 116.00
$ 8,120.00
70
$ 116.00
$ 8,120.00
0
$ 116.00
$ -
30-Aug
30
$ 124.00
$ 3,720.00
20
$ 124.00
$ 2,480.00
10
$ 124.00
$ 1,240.00
12-Dec
70
$ 130.00
$ 9,100.00
$ 130.00
$ -
70
$ 130.00
$ 9,100.00
TOTAL
200
$ 24,060.00
120
$ 13,720.00
80
$ 10,340.00
LIFO
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
30
$ 104.00
$ 3,120.00
0
$ 104.00
$ -
30
$ 104.00
$ 3,120.00
Purchases:
0
$ -
$ -
10-Mar
70
$ 116.00
$ 8,120.00
20
$ 116.00
$ 2,320.00
50
$ 116.00
$ 5,800.00
30-Aug
30
$ 124.00
$ 3,720.00
30
$ 124.00
$ 3,720.00
0
$ 124.00
$ -
12-Dec
70
$ 130.00
$ 9,100.00
70
$ 130.00
$ 9,100.00
0
$ 130.00
$ -
TOTAL
200
$ 24,060.00
120
$ 15,140.00
80
$ 8,920.00
Weighted Average Method
Cost of Goods available for sale
Cost of Goods Sold
Ending Inventory
Units
Cost/unit
COG for sale
Units sold
Cost/unit
COGS
Units
Cost/unit
Ending inventory
Beginning Inventory
30
$ 104.00
$ 3,120.00
120
$ 120.30
$ 14,436.00
80
$ 120.30
$ 9,624.00
Purchases:
0
$ -
$ -
10-Mar
70
$ 116.00
$ 8,120.00
30-Aug
30
$ 124.00
$ 3,720.00
12-Dec
70
$ 130.00
$ 9,100.00
TOTAL
200
$ 120.30 [24060 / 200]
$ 24,060.00
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