6) A company had the following purchases and sales during its first year of oper

Question

6) A company had the following purchases and sales during its first year of operations: Purchases 10 units at $120 ales January units units units units 13 units February:20 units at $125 Ma September: November: 15 units at $130 12 units at $135 10 units at $140 On December 31, there were 26 units remaining in ending inventory. Using the Periodic LIFO inventory valuation method, what is the value of cost of goods sold? (Assume all sales were made on the last day of the month.) A) $8,670. B) $5,400. C) $5,470. D) $3,200. E) $5,130. 7) A company had the following purchases and sales during its first month of operations: anuary1 Purchased 10 units at $4.00 per unit anuary 9 Sold 6 units at $12.00 per unit January 17 Purchased 8 units at $5.50 per unit January 27Sold 7 units at $12.00 per unit Using the Periodic weighted average method, what is the value of cost of goods sold? (Round weighted average cost per unit to 2 decimal places.) A) $84. B) $61. C) $23. D) $27. E) $5

Explanation / Answer

6) Calculate cost of goods sold under LIFO periodic method :

Sales units = 41 units

Cost of goods sold = (10*140+12*135+15*130+4*125) = 5470

so answer is c) $5470

7) Calculate cost of goods sold under weighted average periodic method :

COst of goods available for sale = 84

Total units = 18 units

Cost of goods sold = 84/18*13 = 61

so answer is b) $61

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