Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an it

Question

Periodic Inventory by Three Methods; Cost of Merchandise Sold

The units of an item available for sale during the year were as follows:

There are 40 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.

Jan. 1 Inventory 30 units @ $118 Mar. 10 Purchase 50 units @ $128 Aug. 30 Purchase 10 units @ $136 Dec. 12 Purchase 110 units @ $142

Explanation / Answer

Solution:-

Weighted price per unit = [(30*118)+(50*128)+(10*136)+(110*142)] /200 = 134.6

Method Merchandise Inventory Merchandise Sold FIFO (40*142) = 5680 [(30*118)+(50*128)+(10*136)+(70*142) = 20240 LIFO (30*118)+(10*128) = 4820 (110*142)+(10*136)+(40*128) = 22100 Weighted Avg (134.6*40) = 5384 (134.6*160) = 21536

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