Mojo Industries tracks the number of units purchased and sold throughout each ac

Question

Mojo Industries tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the accounting period, January 31. The inventory’s selling price is $12 per unit. Transactions Unit Cost Units Total Cost Inventory, January 1 $ 4.00 190 $ 760 Sale, January 10 (170 ) Purchase, January 12 4.50 240 1,080 Sale, January 17 (110 ) Purchase, January 26 5.50 70 385 Assuming that for Specific identification method (item 1d) the January 10 sale was from the beginning inventory and the January 17 sale was from the January 12 purchase.

Assuming that for Specific identification method (item 1d) the January 10 sale was from the beginning inventory and the January 17 sale was from the January 12 purchase.

Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January 31 under each of the following inventory costing methods: (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)

Amount of Goods Available for Sale. Ending Inventory. Cost of Goods Sold

a.Weighted average cost

b.First-in, first-out

c.Last-in, first-out

d.Specific identification

Assuming that for Specific identification method (item 1d) the January 10 sale was from the beginning inventory and the January 17 sale was from the January 12 purchase.

Explanation / Answer

Answer to Part a.

Cost of Goods available for Sale = Beginning Inventory + Cost of Purchases
Cost of Purchases = $1,080 + $385 = $1,465
Cost of Goods available for Sale = $760 + $1,465
Cost of Goods available for Sale = $2,225

Weighted Average Cost per Unit = Cost of Goods available for sale / Units available
Units available = 190 + 240 + 70 = 500 units
Weighted Average Cost per Unit = 2,225 / 500
Weighted Average Cost per Unit = $4.45

Units Sold = 170 + 110 = 280 units
Cost of Goods Sold = 280 * $4.45
Cost of Goods Sold = $1,246

Ending Inventory = Cost of Goods available for Sale – Cost of Goods Sold
Ending Inventory = $2,225 - $1,246
Ending Inventory = $979

Answer to Part b.

Cost of Goods available for Sale = Beginning Inventory + Cost of Purchases
Cost of Purchases = $1,080 + $385 = $1,465
Cost of Goods available for Sale = $760 + $1,465
Cost of Goods available for Sale = $2,225

Units Sold = 170 + 110 = 280 units
Cost of Goods Sold = (190 * $4.00) + (90 * $4.50)
Cost of Goods Sold = $760 + $405
Cost of Goods Sold = $1,165

Ending Inventory = Cost of Goods available for Sale – Cost of Goods Sold
Ending Inventory = $2,225 - $1,165
Ending Inventory = $1,060

Answer to Part c.

Cost of Goods available for Sale = Beginning Inventory + Cost of Purchases
Cost of Purchases = $1,080 + $385 = $1,465
Cost of Goods available for Sale = $760 + $1,465
Cost of Goods available for Sale = $2,225

Units Sold = 170 + 110 = 280 units
Cost of Goods Sold = (70 * $5.50) + (210 * $4.50)
Cost of Goods Sold = $385 + $945
Cost of Goods Sold = $1,330

Ending Inventory = Cost of Goods available for Sale – Cost of Goods Sold
Ending Inventory = $2,225 - $1,330
Ending Inventory = $895

Answer to Part d.

Cost of Goods available for Sale = Beginning Inventory + Cost of Purchases
Cost of Purchases = $1,080 + $385 = $1,465
Cost of Goods available for Sale = $760 + $1,465
Cost of Goods available for Sale = $2,225

Units Sold = 170 + 110 = 280 units
Cost of Goods Sold = (170 * $4.00) + (110 * $4.50)
Cost of Goods Sold = $680 + $495
Cost of Goods Sold = $1,175

Ending Inventory = Cost of Goods available for Sale – Cost of Goods Sold
Ending Inventory = $2,225 - $1,175
Ending Inventory = $1,050

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