Greg’s Bicycle Shop has the following transactions related to its top-selling Mo
ID: 2445661 • Letter: G
Question
Greg’s Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March 2015. Greg's Bicycle Shop uses a periodic inventory system.
Total: $11,940
Using FIFO, calculate ending inventory and cost of goods sold at March 31, 2015.
2.
Greg’s Bicycle Shop has the following transactions related to its top-selling Mongoose mountain bike for the month of March 2015. Greg's Bicycle Shop uses a periodic inventory system.
Date Transactions Units Cost Per Unit Total Cost March 1 Beginning Inventory 20 $230 $4,600 March 5 Sale ($360 each) 15 March 9 Purchase 10 $250 $2,500 March 17 Sale ($410 each) 8 March 22 Purchase 10 $260 $2,600 March 27 Sale ($435 each) 12 March 30 Purchase 8 $280 $2,240Total: $11,940
1.Using FIFO, calculate ending inventory and cost of goods sold at March 31, 2015.
2.
Using LIFO, calculate ending inventory and cost of goods sold at March 31, 2015.Explanation / Answer
Solution:
(A). Closing Inventory
Closing Inventory = 4,600 + 7,340 - 13,900
= 1,960
Working Notes:-
Begining Inventory = 4,600
Purchase :
250 * 10 = 2,500
260 * 10 = 2,600
280 * 8 = 2,240
Total = 7,340
Sales :
360 * 15 = 5,400
410 * 8 = 3,280
435 * 12 = 5,220
Total = 13,900
(B). Cost of Goods Sold:
Cost of Goods Sold = 4,600 + 7,340 - 1,960
= 11,940 - 1,960
= 9,980
Ending Inventory:
Ending Inventory = 4,600 + 7,340 - 9,980
= 11,940 - 9,980
= 1,960
Closing Inventory = Opening Inventory + Purchase - SalesRelated Questions
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