EX 6-12 Periodic inventory by three methods The units of an item available for s

Question

EX 6-12 Periodic inventory by three methods The units of an item available for sale during the year were as follows: OBJ. 2, 4 Jan. 1 Inventory 200 units at $60 Feb. 17 July 21 Nov. 23 Purchase275 units at $64 Purchase 300 units at $68 Purchase 225 units at $70 There are 220 units of the item in the physical inventory at December 31. The periodic m is used. Determine the inventory cost by (a) the first-in, first-out method, (b) the last-in, first-out method, and (c) the weighted average cost method.

Explanation / Answer

Calculate inventory cost under following method :

Cost of goods available for sale

(200*60+275*64+300*68+225*70)

FIFO LIFO Weighted average Units available for sale 1000 1000 1000

Cost of goods available for sale

(200*60+275*64+300*68+225*70)

65750 65750 65750 Ending inventory 220*70=15400 200*60+20*64=13280 (65750/1000)*220=14465 Cost of goods sold 50350 52470 51285

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