Go Tro uses a periodic inventory system. At the beginning of the January 2017, i
ID: 2467486 • Letter: G
Question
Go Tro uses a periodic inventory system. At the beginning of the January 2017, inventory consisted of 2,000 units costing $8 each. On January 10, 4,500 units were purchased costing $9 each. Finally, on January 20, 3,000 more units were purchased costing $10.50 each. Unit sales consisted of 1,000 units on January 8 for $20 each, 4,000 units on January 15 for $22 each, and 1,500 units for $24 each on January 25.
a. Calculate cost of goods sold, ending inventory, and gross profit under the FIFO method.
b. Calculate cost of goods sold, ending inventory, and gross profit under the LIFO method.
c. Calculate cost of goods sold, ending inventory, and gross profit under the weighted average method.
Explanation / Answer
FIFO
Receipts
Issues
Balance
Date
Description
Qty
Rate
Amount
Qty
Rate
Amount
Qty
Rate
Amount
1-Jan
Beg Inventory
2,000
8.00
16,000
10-Jan
Purchases
4,500
9.00
40,500
20-Jan
Purchases
3,000
10.50
31,500
500
9.00
4,500
3,000
10.50
31,500
9,500
88,000
-
-
3,500
36,000
FIFO
Units
Rate
Amount
Amount
Sales
1000 x 20 +(4000 x 22)+(1500 x 24)
144,000
Goods Available For Sale
9,500
88,000
Less: Ending Inventory
3,500
(36,000)
Cost Goods Sold
52,000
Gross Profit
92,000
LIFO
Receipts
Issues
Balance
Date
Description
Qty
Rate
Amount
Qty
Rate
Amount
Qty
Rate
Amount
1-Jan
Beg Inventory
2,000
8.00
16,000
10-Jan
Purchases
4,500
9.00
40,500
20-Jan
Purchases
3,000
10.50
31,500
2,000
8.00
16,000
1,500
9.00
13,500
9,500
88,000
-
-
3,500
29,500
LIFO
Units
Rate
Amount
Amount
Sales
1000 x 20 +(4000 x 22)+(1500 x 24)
144,000
Goods Available For Sale
9,500
88,000
Less: Ending Inventory
3,500
(29,500)
Cost Goods Sold
58,500
Gross Profit
85,500
Weighted Average
Receipts
Issues
Balance
Date
Description
Qty
Rate
Amount
Qty
Rate
Amount
Qty
Rate
Amount
1-Jan
Beg Inventory
2,000
8.00
16,000
10-Jan
Purchases
4,500
9.00
40,500
20-Jan
Purchases
3,000
10.50
31,500
3,500
9.26
32,421
9,500
9.26
88,000
-
-
3,500
9.26
32,421
LIFO
Units
Rate
Amount
Amount
Sales
1000 x 20 +(4000 x 22)+(1500 x 24)
144,000
Goods Available For Sale
9,500
88,000
Less: Ending Inventory
3,500
(32,421)
Cost Goods Sold
55,579
Gross Profit
88,421
FIFO
Receipts
Issues
Balance
Date
Description
Qty
Rate
Amount
Qty
Rate
Amount
Qty
Rate
Amount
1-Jan
Beg Inventory
2,000
8.00
16,000
10-Jan
Purchases
4,500
9.00
40,500
20-Jan
Purchases
3,000
10.50
31,500
500
9.00
4,500
3,000
10.50
31,500
9,500
88,000
-
-
3,500
36,000
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