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Safari File Edit View History Bookmarks Window Help ezto mheducation.com Week 8-Inventory Pt 2 HL I Neo E7-5 Calculating Cost of Ending Inventory and Cost of Goods Sold under Periodi 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 it uses a periodic inventory system. Assume Oahu Kikis records show the following for the month of January. Sales totaled 290 units. Date Units Unit Cost Total Cost Beginning InventoryJanuary 1 240 $70 $16,800 36,000 21,000 Purchase Purchase January 15 450 80 January 24 210 100 1. Calculate the number and cost of goods available for sale Number of Goods Available for Sale Cost of Goods Available for Sale units 2. Caloulate the number of units in ending inventory 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 13

Explanation / Answer

Answer:

1

Calculate the number and cost of goods available for sale

Goods Available for Sale

900

Units

Cost of Goods Available for Sale

73800

Dollar

Working notes for the above answer is as under

Units

Unit

Total

Cost

Cost

Beginning Inventory

240

70

16800

+ Purchase (Jan 15)

450

80

36000

+ Purchase (Jan 24)

210

100

21000

Goods Available for Sale

900

73800

________________________________________________________

2

Ending invemtory

610

Units

Working notes for the above answer is as under

Goods Available for Sale

900

Units

Less:

Units sold

290

Units

Ending invemtory

610

Units

_____________________________________________________-

3

Cost of
ending inventory

Cost of Goods Sold

FIFO

53000

20800

LIFO

46400

27400

Weifhted AveraGe

50020

23780

Working notes for the above answer is as under

a. FIFO

  

Total
amount

ending Inventory

(210 units x $100)

21000

(400 units x $ 80)

32000

53000

Cost of Goods Sold

(240 units x $70)

16800

(50 units x $80)

4000

20800

b. LIFO

  

ending Inventory

(240 units x $70)

16800

(370 units x $80)

29600

46400

Cost of Goods Sold

(210 units x $100)

21000

(80 units x $ 80)

6400

27400

Average Unit Cost

$73,800 / 900 units

= $82

Ending Inventory

(610 units x $82)

= $50020

Cost of Goods Sold

(290 units x $82)

= $23780

Goods Available for Sale

900

Units

Cost of Goods Available for Sale

73800

Dollar

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