Corp had the following information regarding inventory transactions at the end o

Question

Corp had the following information regarding inventory transactions at the end of October. Year to date Cost of Goods sold at October 1 was $236,700. 4. XYZ Unit cost $10 $12 Total Cost $90,000 $36,000 Date Oct 1 Oct 4 Oct 11 Oct 15 Oct 22 Oct 29 Determine the year to date balances as of October 31 for Ending Inventory and Cost of Goods sold under each of the following inventory methods: (a) periodic FIFO (b) periodic LIFO (c) weighted average Event Beg inventory Purchase Sale Sale Purchase Sale # of units 9000 3000 8000 2000 10000 5000 $14 $140,000 (20pts) Ending Inventory COGS FIFO LIFO Weighted Average

Explanation / Answer

Answer 4.

Periodic FIFO:

Number of units available for use = 9,000 + 3,000 + 10,000
Number of units available for use = 22,000

Cost of Goods available for use = 9,000 * $10 + 3,000 * $12 + 10,000 * $14
Cost of Goods available for use = $266,000

Number of units sold = 8,000 + 2,000 + 5,000
Number of units sold = 15,000

Number of units in Ending Inventory = Number of units available for use - Number of units sold
Number of units in Ending Inventory = 22,000 - 15,000
Number of units in Ending Inventory = 7,000

Cost of Goods Sold = 9,000 * $10 + 3,000 * $12 + 3,000 * $14
Cost of Goods Sold = $168,000

Ending Inventory = 7,000 * $14
Ending Inventory = $98,000

Periodic LIFO:

Number of units available for use = 9,000 + 3,000 + 10,000
Number of units available for use = 22,000

Cost of Goods available for use = 9,000 * $10 + 3,000 * $12 + 10,000 * $14
Cost of Goods available for use = $266,000

Number of units sold = 8,000 + 2,000 + 5,000
Number of units sold = 15,000

Number of units in Ending Inventory = Number of units available for use - Number of units sold
Number of units in Ending Inventory = 22,000 - 15,000
Number of units in Ending Inventory = 7,000

Cost of Goods Sold = 10,000 * $14 + 3,000 * $12 + 2,000 * $10
Cost of Goods Sold = $196,000

Ending Inventory = 7,000 * $10
Ending Inventory = $70,000

Weighted-Average:

Number of units available for use = 9,000 + 3,000 + 10,000
Number of units available for use = 22,000

Cost of Goods available for use = 9,000 * $10 + 3,000 * $12 + 10,000 * $14
Cost of Goods available for use = $266,000

Number of units sold = 8,000 + 2,000 + 5,000
Number of units sold = 15,000

Number of units in Ending Inventory = Number of units available for use - Number of units sold
Number of units in Ending Inventory = 22,000 - 15,000
Number of units in Ending Inventory = 7,000

Per unit cost = Cost of Goods available for use / Number of units available for use
Per unit cost = $266,000 / 22,000
Per unit cost = $12.09

Cost of Goods Sold = 15,000 * $12.09
Cost of Goods Sold = $181,350

Ending Inventory = 7,000 * $12.09
Ending Inventory = $84,650

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