Question 5 (10 points) Alpha Company uses the periodic inventory system and had

Question

Question 5 (10 points)

Alpha Company uses the periodic inventory system and had the following inventory & sales activity for the month of May 2016:

Date

5/1

ACTIVITY

Beginning Inventory

QUANTITY

100

UINIT PRICE

$12

DATE

5/5

ACTIVITY

Purchase

QUANTITY

200

UNIT PRICE

$13

DATE

5/15

ACTIVITY

Purchase

QUANTITY

300

UNIT PRICE

$14

DATE

5/25

ACITIVITY

Purchase

QUANTITY

200

UNIT PRICE

$15

Sales were 500 units, Ending Inventory was 300. Using the FIFO method, determine the dollar values following for the month of May: 1. Ending Inventory 2. Cost of Goods Available for Sale 3. Cost of Goods Sold

Explanation / Answer

Calculate following :

1) Ending inventory = (200*15+100*14) = $4400

2) Cost of goods available for sale = $11000

3) Cost of goods sold = 11000-4400 = $6600

Unit Cost per unit Total cost Beginning inventory 100 12 1200 Purchase 5/5 200 13 2600 Purchase 5/15 300 14 4200 Purchase 5/25 200 15 3000 Total 800 11000

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