Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an it

Question

Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an item available for sale during the year were as follows: Jan. 1 Inventory Mar. 10 Purchase Aug. 30 Purchase Dec. 12Purchase 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 40 units $100 70 units @ $108 30 units $116 60 units$122 Inventory Method Merchandise Inventory erchandise Sold Weighted average cost

Explanation / Answer

Calculate inventory cost and merchandise sold :

Units available for sale = 40+70+30+60 = 200 Units

Cost of goods available for sale = (4000+7560+3480+7320) = 22360

Merchandise inventory Merchandise sold First in First out 60*122+20*116 = 9640 22360-9640 = 12720 Last in Last out 40*100+40*108 = 8320 22360-8320 = 14040 Weighted average (22360/200*80) = 8944 22360-8944 = 13416

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