Inventory by Three Methods; Cost of Goods Sold The units of an item available fo

Question

Inventory by Three Methods; Cost of Goods Sold

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

There are 20 units of the item in the A detailed listing of merchandise on hand.physical inventory at December 31.

Determine the cost of ending inventory and the cost of goods sold by three methods, presenting your answers in the following form:

Round your intermediate calculations and final answers to the nearest dollar.

Jan. 1 Inventory 20 units at $1,800 May 15 Purchase 29 units at $1,950 Aug. 7 Purchase 13 units at $2,040 Nov. 20 Purchase 15 units at $2,100

Explanation / Answer

a) FIFO:
Ending inventory=2100+((2040/13)*5)=2885
Cost of goods sold=1800+1950+2040+2100-2885=5005
b)LIFO:
Ending inventory=1800
Cosgt of goods sold=1950+2040+2100=6090
c)Weighted average method:
weighted avg cost per unit=(1800+1950+2040+2100)/(20+29+13+15)
=102.47
Ending inventory=102.47*20=2049
Cost of goods sold=102.47*(29+13+15)=5841

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