E7-5 Calculating Cost of Ending Inventory and Cost of Goods Sold under Periodic

Question

E7-5 Calculating Cost of Ending Inventory and Cost of Goods Sold under Periodic FIFO, LIFO, and Weighted Average Cost LO 7-3] Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki's records show the following for the month of January. Sales totaled 300 units. Beginning Inventory Purchase Purchase Date Janua January 15 320 January 24 240 Units Unit Cost Total Cost ry 1 240 75$18,000 27,200 25,200 85 105 Required: 1. Calculate the number and cost of goods available for sale. Number of Goods Available for Sale 800 units Cost of Goods Available for Sale $ 70,400 2. Calculate the number of units in ending inventory Invent 500: units 3. Calculate the cost of ending inventory and cost of goods sold using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods. Cost of Ending Inventory Cost of Goods Sold FIFO LIFO Weighted Average Cost

Explanation / Answer

1) No of goods available for sale = 800 units

Cost of goods available for sale = 70400

2) Ending inventory = 800-300 = 500 units

3) Calculate cost of ending inventory and cost of goods sold

Cost of ending inventory Cost of goods sold FIFO (240*105+260*85) = 47300 (70400-47300) = 23100 LIFO (240*75+260*85) = 40100 (70400-40100) = 30300 Weighted average (70400/800*500) = 44000 (70400-44000) = 26400

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