The units of an item available for sale during the year were as follows: Jan. 1

Question

The units of an item available for sale during the year were as follows: Jan. 1 Inventory Mar. 10 Purchase Aug. 30 Purchase Dec. 12 Purchase There are 60 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. 50 units@$114 70 units$126 30 units @ $132 50 units @ $138 Cost of Merchandise Inventory and Cost of Merchandise Sold Inventory Method Merchandise Inventory Merchandise Sold First-in, first out (FIFO) Last-in, first-out (LIFO) Welghted average cost

Explanation / Answer

Note As per Chegg only first question is allowed.

Ending inventory =60 units Calculation of inventory cost a.       First- in ,First -out method 50 units at $138 per unit (Dec 12 purchase)=$6900 10 units at $132 (Aug 20 purchase)=$1320 Total value of ending inventory as per FIFO method= $8220 b.      The last-in ,First –out method 50 units at $114(beginning inventory Jan.1)=$5700 10 units at $126(Mar 10 purchase)=$1260 Total value of ending inventory as per LIFO method=$6960 c.       Weighted average cost method: Weighted average unit cost= Total cost of inventory/Total units available for sale                      = $5700+$8820+$3960+$6900/50+70+30+50 =$25380/200 =$126.90 Value of ending inventory= $126.9*60=$7614

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.