ezto tion.com Stores Reported The F n A... I Ch HW7 10 pts due 3/14 Question 1 (
ID: 2543257 • Letter: E
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ezto tion.com Stores Reported The F n A... I Ch HW7 10 pts due 3/14 Question 1 (of 3) 1. 4.00 points In its first month of operations, Literacy for the lliterate opened a new bookstore and bought merchandise in the following order: (1) 320 units at $6 on January 1, (2) 540 units at $7 on January 8, and (3) 840 units at $9 on January 29 Assume 1,035 units are on hand at the end of the month, calculate the cost of goods available for sale, ending inventory, and cost of goods sold under the (a) FIFO, (b) LIFO, and (c) weighted average cost flow assumptions. Assume a periodic inventory system is used. (Round "Cost per Unit to 2 decimal places.) FIFO LIFO $ 13.260 r s 1326of S Cost of Goods Available for Sale Ending Inventory Cost of Goods Sold 13,260 References eBook & Resources Worksheet Difficulty: 2 Medium Learning Objective: 07-03 CormExplanation / Answer
A) FIFO METHOD
Cost of goods sold (CGS) = 1,920 + 3,780 + (220 x 9)
= $ 7,680
Ending Inventory = $ 13,260 - $ 7680
= $ 5,580
B) LIFO METHOD
Cost of goods sold (CGS) = $ 7560 + (220 x 7)
= $ 9,100
Ending Inventory = $ 13,260 - $ 9,100
= $ 4,160
C) WEIGHTED AVERAGE COST METHOD
Cost per unit = $ 13260 / 1,700 = 7.8 per unit
Cost of goods sold (CGS) = 1035 Unit x 7.8
= $ 8,073
Ending Inventory = $ 13,260 - $ 8073
= $ 5,187
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