Question 2: Floppy uses the period method and had the following inventory events
ID: 2498154 • Letter: Q
Question
Question 2:
Floppy uses the period method and had the following inventory events during January:
Date
Units Purchased
Unit Cost
Date
Units Sold
Unit Sales Price
Jan. 1
150
$7.00
Jan. 2
100
$10.00
Jan. 5
225
7.20
Jan. 7
125
10.00
Jan. 10
100
7.50
Jan. 12
75
12.00
Jan. 15
150
7.80
Jan. 17
200
12.50
Jan. 20
200
7.95
Jan. 24
150
15.00
Jan. 25
150
8.00
Jan. 30
75
8.20
Note: January 1 amount was the beginning inventory and unit value.
(Round all total dollar values to the nearest dollar. Round all unit values to the nearest penny.)
Required:
a. Calculate cost of goods available for sale.
b. Calculate the dollar value of sales.
c. Calculate the value of Ending Inventory and Cost of Good Sold under the following independent assumptions:
1) LIFO method
2) FIFO method
3) Average-cost method
Please use this format to answer the study guide question:
Question 2:
a. Cost of Goods Available for Sale
b. Sales
c. Value of:
Ending Inventory
COGS
1) LIFO method
2) FIFO method
3) Average-cost method
Date
Units Purchased
Unit Cost
Date
Units Sold
Unit Sales Price
Jan. 1
150
$7.00
Jan. 2
100
$10.00
Jan. 5
225
7.20
Jan. 7
125
10.00
Jan. 10
100
7.50
Jan. 12
75
12.00
Jan. 15
150
7.80
Jan. 17
200
12.50
Jan. 20
200
7.95
Jan. 24
150
15.00
Jan. 25
150
8.00
Jan. 30
75
8.20
Explanation / Answer
a. cost of goods available for sale :
= Beginning Inventory + Purchase during the year
= (150 * $7) + [ (225 * $7.20) + (100*$7.50) +(150 *$7.80) + (200*$7.95)+(150*$8)+(75*$8.20)
= 1050 + 1620 + 750 + 1170 + 1590 + 1200 + 615
=$7995
b. dollar value of sales = Units * price per unit
= (100*$10) + (125*$10)+ (75*$12) + (200*$12.5) + (150* $15)
= $7900
c LIFO Method:
Value of ending Inventory:
1st january 150 * $7 =$1050
5st january 225 * $7.20 =$1620
10th january 25 * $7.50 = $188
$2858
Cost of goods sold
30 january 75 * $8.20 =$615
25 January 150 * $8 = $1200
20 January 200 * $7.95 = $1590
15 January 150 * $7.80 = $1170
10 january 75 * $7.5 = $ 563
$5138
FIFO method :
Value of ending Inventory:
20 january 175 * $7.95 = $1391
25January 150 * $8 =$1200
30January 75 * $8.20 = $615
$3206
Cost of goods sold
1 January 150 * $7 = $1050
5 January 225* $7.20 =$1620
10January 100 * $7.50 = $750
15 January 150 * $7.80 =$1170
20 January 25 *$7.95 = $199
$4789
Average-cost method :
Average cost per unit = (Beginning inventory cost + puchase cost) / (Beginning unit + Purchase Unit)
= $1050 + $6945 / 150 + 900
= $7995/ 1050
= $7.61 per unit
Value of ending Inventory: (total unit available for sale - sale) * $7.61
= (1050 - 650) * 7.61
= $3044
cost of goods sold = sales unit * $7.61
= 650units * $7.61
=$4947
Question 2:
a. Cost of goods available for sale $7995
b. sales $7900
c value of : Ending inventory COGS
1) LIFO Method $2858 $5138
2) FIFO $3206 $4789
3) Average cost $3044 $4947
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