A company had the following inventory transactions during Apri: Purchases: 4/1 B

Question

A company had the following inventory transactions during Apri: Purchases: 4/1 Beginning inventory: 2000 unitsS1.00 per unit 4/5 Purchased 3,000 units at $1.10 per unit 4/15 Purchased 5,000 units at $1.20 per unit 4/25 Purchased 2,000 units at S1.25 per unit Sales: 4/3 Sold 500 units 4/16 Sold 4,000 units 4/30 Sold 3,000 units Using the above information, calculate the dollar amount of Cost of Goods Sold and Ending Inventory assuming: a. The company uses a periodic inventory system and First-in, First-out b. The company uses a periodic inventory system and Last-in, First-out c. The company uses a perpetual inventory system and Last-in, First-out

Explanation / Answer

Calculate cost of goods sold and ending invenotry :

FIFO periodic LIFO periodic LIFO perpetual Ending inventory (2000*1.25+2500*1.20) = 5500 (2000*1+2500*1.1)= 4750 (1500*1+3000*1.1) = 4800 Cost of goods sold (2000*1+3000*1.1+2500*1.20) = 8300 (500*1.1+5000*1.2+2000*1.25) = 9050 (500*1+4000*1.20+2000*1.25+1000*1.20) = 9000

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