Question 1 Swifty Company\'s record of transactions for the month of April was a

Question

Question 1 Swifty Company's record of transactions for the month of April was as follows. Purchases Sales April 1 (balance on hand) 684 $5.00 1,710 Q 6.09 912 6.38 1,368 5.48 798 6.58 570 6.76 Aprll 3 570$10.00 9 1,596 10.00 11 68411.00 23 1,368 11.00 27 1,02612.00 13 21 29 5,244 6,042 Assuming that periodic inventory records are kept in units only, calculate the average-cost per unit. (Round answer to 2 decimal places, e.g. 2.76.) Average-cost per unit per unit Assuming that periodic inventory records are kept in units only, compute the inventory at April 30 using LIFO and average-cost. (Round answer to 0 decimal places, e.g. 2,760.) LIFO Average-cost Assuming that perpetual inventory records are kept in dollars, determine the inventory using (1) FIFO and (2) LIFO. (Round answer to O decimal places, e.g. 2,760.) FIFO LIFO Inventory Compute cost of goods sold assuming periodic inventory procedures and inventory priced at FIFO. (Round answer to 0 decimal places, e.g. 2,760.) Cost of goods sold

Explanation / Answer

Answer 1 Calculation fo average cost per unit Average cost per unit = (Beginning Inventory value + Total purchase cost) / no.of units Total of Beginning Inventory value + Total purchase cost = Units Rate per unit Total 684 $6.00 $4,104.00 1710 $6.09 $10,413.90 912 $6.38 $5,818.56 1368 $6.48 $8,864.64 798 $6.58 $5,250.84 570 $6.76 $3,853.20 Total Purchase cost = $38,305.14 Average cost per unit = $38,305.14 / 6042 units = $6.34 per unit Answer 2 Computation of Inventory value of at April-30 using LIFO Periodic Inventory Units in ending Inventory at April-30 = Purchase - sales = 6042 units - 5244 units = 798 units Ending inventory under LIFO consist of units from old purchases. Value of ending inventory under LIFO = (684 units * $6) + (114 units * $6.09) = $4798 Value of ending Inventory under average cost method = 798 units * $6.34 = $5059 Answer 3 Inventory value using FIFO Perpetual Inventory method Inventory value using LIFO Perpetual Inventory method Date Purchases Cost of goods sold Inventory balance Date Purchases Cost of goods sold Inventory balance Units Rate Total Units Rate Total Units Rate Total Units Rate Total Units Rate Total Units Rate Total Apr-01 684            6.00 4104 Apr-01 684           6.00      4,104.00 Apr-03 570 6 3420 114            6.00 684 Apr-03 570 6 3420 114           6.00          684.00 Apr-04 1710 6.09 10413.9 114            6.00 684 Apr-04 1710 6.09 10413.9 114           6.00          684.00 1710            6.09 10413.9 1710           6.09    10,413.90 Apr-08 912 6.38 5818.56 114            6.00 684 Apr-08 912 6.38 5818.56 114           6.00          684.00 1710            6.09 10413.9 1710           6.09    10,413.90 912            6.38 5818.56 912           6.38      5,818.56 Apr-09 114 6 684 Apr-09 912 6.38 5818.56 114           6.00          684.00 1482 6.09 9025.38 228            6.09    1,388.52 684 6.09 4165.56 1026           6.09      6,248.34 912            6.38    5,818.56 Apr-11 228 6.09 1388.52 Apr-11 114           6.00          684.00 456 6.38 2909.28 456            6.38    2,909.28 684 6.09 4165.56 342           6.09      2,082.78 Apr-13 1368 6.48 8864.64 456            6.38    2,909.28 Apr-13 1368 6.48 8864.64 114           6.00          684.00 Apr-21 798 6.58 5250.84 1368 6.48 8864.64 Apr-21 798 6.58 5250.84 342           6.09      2,082.78 798 6.58 5250.84 1368 6.48      8,864.64 Apr-23 456 6.38 2909.28 798 6.58      5,250.84 912 6.48 5909.76 456            6.48    2,954.88 Apr-23 798 6.58 5250.84 114           6.00          684.00 798            6.58    5,250.84 570 6.48 3693.6 342           6.09      2,082.78 Apr-27 456 6.48 2954.88 798 6.48      5,171.04 570 6.58 3750.6 228            6.58    1,500.24 Apr-27 798 6.48 5171.04 114           6.00          684.00 Apr-29 570 6.76 3853.2 228            6.58    1,500.24 228 6.09 1388.52 114           6.09          694.26 570            6.76    3,853.20 Apr-29 570 6.76 3853.2 114           6.00          684.00 Inventory Value at April 30 using FIFO Perpetual Inventory $5,353.44 114           6.09          694.26 570           6.76      3,853.20 Inventory Value at April 30 using LIFO Perpetual Inventory      5,231.46 FIFO LIFO Inventory $5,353 $5,231 Answer 4 Computation of cost of goods sold assuming periodic inventory FIFO Ending inventory under FIFO consist of units from latest purchases. Value of ending inventory under FIFO = (570 units * $6.76) + (228 units * $6.58) = $5353.44 Cost of goods sold = Inventory value at beginning + Purchases - Inventory value at the end = $4104 + $34201.14 -$5353.44 = $32,952 Answer 5 In an inflationary period , FIFO inventory method will show the highest net income.

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