Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an it

Question

Periodic Inventory by Three Methods; Cost of Merchandise Sold

The units of an item available for sale during the year were as follows:

There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.

Jan. 1 Inventory 50 units @ $122 Mar. 10 Purchase 50 units @ $134 Aug. 30 Purchase 30 units @ $138 Dec. 12 Purchase 70 units @ $142

Explanation / Answer

Determine the inventory cost and the cost of merchandise sold by three methods.

Inventory Method Cost of goods available for sale Merchandise Inventory Merchandise Sold First-in, first-out (FIFO) 26880 (70*142+10*138) = 11320 15560 Last-in, first-out (LIFO) 26880 (50*122+30*134) = 10120 16760 Weighted average cost 26880 (26880/200*80) = 10752 16128

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