Shown below is the activity for one of the products of Random Creation Beginning

Question

Shown below is the activity for one of the products of Random Creation

Beginning Inventory:

January 1 balance, 80 units @ $50 $4,000

Purchases:

January 18: 40 units @ $51

January 28: 40 units @ $52

Sales:

January 12: 30 units

January 22: 40 units

January 31: 45 Units

Requirment 1: Compute the January 31 ending inventory and cost of goods sols for january, assuming Random creations uses FIFO and a periodic inventory system

Requirment 2: Compute the January 31 ending inventory and cost of goods sols for january, assuming Random creations uses average cost and the periodic inventory system.

Requirment 3: Compute the January 31 ending inventory and cost of goods sols for january, assuming Random creations uses LIFO and the periodic inventory system

Requirment 4: Compute the January 31 ending inventory and cost of goods sols for january, assuming Random creations uses FIFO and a perpetual inventory system

Explanation / Answer

Random Creation Date Particular Quantity Rate Amount 1-Jan Beginning Inventory 80 $             50.00 $     4,000.00 12-Jan Sales 30 18-Jan Purchases 40 $             51.00 $     2,040.00 22-Jan sales 40 28-Jan Purchases 40 $             52.00 $     2,080.00 31-Jan Sales 45 31-Jan Closing Inventory 45 $     8,120.00 Requirement 1 FIFO PERIODIC METHOD Closing Inventory Date Quantiity Rate Amount 28-Jan 40 $                      52.00 $       2,080.00 18-Jan 5 $                      51.00 $          255.00 45 $       2,335.00 Cost of goods sold Opening Inventory and Purchases $       8,120.00 less:Closing Inventory $       2,335.00 Cost of goods sold $       5,785.00 Requirement 2 Average Periodic Method Date Particular Quantity Units Amount 1-Jan Opening Inventory 80 $             50.00 $     4,000.00 18-Jan Purchases 40 $             51.00 $     2,040.00 28-Jan Purchases 40 $             52.00 $     2,080.00 160 $             50.75 $     8,120.00 Average Rate= 50.75 Closing Inventory Date Quantity Rate Amount 31-Jan 45 $             50.75 $     2,283.75 Cost of goods Sold Quantity Rate Amount 115 $             50.75 $     5,836.25 Requirement 3 LIFO Periodic Method Closing Inventory Date Quantity Rate Amount 31-Jan 45 $             50.00 $     2,250.00 Cost of units available for sales Date Quantity Rate Amount 1-Jan 80 $             50.00 $     4,000.00 18-Jan 40 $             51.00 $     2,040.00 28-Jan 40 $             52.00 $     2,080.00 160 $     8,120.00 Cost of goods sold Cost of goods sold avalable for the month $     8,120.00 less:Closing Inventory $     2,250.00 Cost of goods sold $     5,870.00 Requirement 4 FIFO Prepectual Date Purchases Sales Balance 1-Jan Beginning balance 80 units@50 $ 4,000.00 12-Jan 30 units@50 50 units@50 $ 2,500.00 18-Jan 40 units@51 50 units@50 $ 2,000.00 40 units@51 $ 2,040.00 22-Jan 40units@50 10 units @50 $     500.00 40 units @51 $ 2,040.00 28-Jan 40 units @52 10 units @50 $     500.00 40 units@51 $ 2,040.00 40 units@52 $ 2,080.00 31-Jan 10 units@50 5 units@51 $     255.00 35 units@51 40units@52 $ 2,080.00 $ 2,335.00 Closing Inventory $       2,335.00 Cost of goods sold $       5,785.00

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