https://edugen.wleyplus.com/edugen/studentimaintr.ani ssignment HY INSTRUCTOR UL
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https://edugen.wleyplus.com/edugen/studentimaintr.ani ssignment HY INSTRUCTOR ULL SCREEN PRINTER ERON Exercise 6-4 Waterway Corp. sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information ding so Wstensay Corp 's purchases of EZslide snowboards during September, During the same month, 94 Ezslide snowboerds mere sold. Weterway Corp. uses o périndk inwerbory syte BACK Explanation Units Unit Cost Total Cost Sept. 1 Sept. 12 Sept. 19 Sept. 26 Inventory Purchases Purchases Purchases Totals 13 $107 110 1,391 udy 45 20 124 4,995 2,240 $13,686 (a) Compute the ending inventory at September 30 using the FIFO, LIFO and sverage-cost methods. ound average cost per unit to 3 decimal places, e.g. 125.153 and final answers to 0 declmal places, e.g. 125.) AVERAGE COST The ending inventory at September 30 (b) Compute the cost of goods sold st September 30 using the FEO LFO and average-cost mthods. (Roumd average cast per unir to : places, e.g. 125.153 and final answers to 0 decimal places, eg, 12s.) LIFO Cost of goods sold s Click if you would like to Show Work for this question: Ocen Shew WorkExplanation / Answer
Calculation of ending inventory using FIFO method:
FIFO method:
In this method goods issued are valued at the price with following preference i.e., First-in-first out. Goods are valued relevant to available stock price. Closing stock is valued at the price in which goods are remaining. In this method closing stock is close to market price.
Closing stock = 124 – 94 = 30
Value of closing stock = (45-35) * 111 + 20*112 = 10* 111 + 20*112 = $3,350
Cost of goods sold = Opening stock + purchases – Closing stock
= $13,686 - $3,350
= $10,336
Calculation of ending inventory based on LIFO:
LIFO method:
In this method goods issued are valued at the price in with which goods entered later. The closing stock is valued at prices relevant to the prices prevailing at the beginning when they are purchased.
Closing stock = 124 – 94 = 30
Value of closing stock = (13 * $107) + (30-13) * 110 = 13*107 + 17*110 = $3,261
Cost of goods sold = Opening stock + purchases – Closing stock
= $13,686 - $3,261
= $10,607
Average cost method:
As this is periodic inventory system unit cost should be valued as weighted average cost per unit.
Weighted average cost = total cost of inventory / Total units of inventory
= $13,686 / 124
= $110.37
Closing stock = 30 * 110.37 = $3,311
Cost of goods sold = Opening stock + purchases – Closing stock
= $13,686 - $3,311
= $10,375
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