Kudos Leather Goods purchased the following items during the month of April: 1.
ID: 2479158 • Letter: K
Question
Kudos Leather Goods purchased the following items during the month of April:
1. April 12, 34 wallets @ $12.95 each
2. April 08, 24 wallets @ $13.10 each
3. April 18, 15 wallets @ $13.25 each
4. April 26, 20 wallets @ $13.27 each
On April 1, the business had an inventory of 19 wallets valued at $12.90 each. On April 30, the business had 36 wallets in inventory. Of those wallets, 8 were purchased on April 2, 15 were purchased on April 8, 3 were purchased on April 18, and 10 were purchased on April 26.
Calculate the cost of the ending inventory using the following methods:
a. Specific identification method
b. FIFO method
c. LIFO method
d. Weighted average cost method
Also, find the cost of merchandise sold under each method.
Explanation / Answer
Answer A
Specific identification
Inventory = $472.55
Cost of merchandise sold = 1463.95-472.55 = $991.40
Dates
No of wallets
Price
Total
Apr-12
8
12.95
103.6
Apr-08
15
13.1
196.5
Apr-18
3
13.25
39.75
Apr-26
10
13.27
132.7
Total
36
472.55
Answer B
FIFO method
Inventory =477.25
Cost of merchandise sold = 1463.95-477.25 = $986.7
Dates
No of wallets
Price
Total
Apr-08
1
13.1
13.1
Apr-18
15
13.25
198.75
Apr-26
20
13.27
265.4
Total
36
13.26
477.25
Answer C
LIFO method
Inventory 465.25
Cost of merchandise sold = 1463.95-465.25=998.70
Dates
No of wallets
Price
Total
Apr-01
19
12.9
245.1
Apr-12
17
12.95
220.15
Total
36
12.92
465.25
Dates
No of wallets
Price
Total
Apr-12
8
12.95
103.6
Apr-08
15
13.1
196.5
Apr-18
3
13.25
39.75
Apr-26
10
13.27
132.7
Total
36
472.55
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