Computing LIFO and journalizing inventory transactions Energizer Equipment sells
ID: 2640751 • Letter: C
Question
Computing LIFO and journalizing inventory transactions
Energizer Equipment sells hand-held engine analyzers to automotive service shops. Energizer Equipment started April with an inventory of 125 units that cost a total of $19,250. During the month, Energizer Equipment purchased and sold merchandise on account as follows:
Energizer Equipment used the LIFO method. Cash payments on account totaled $17,500. Operating expenses for the month were $13,500, with two-thirds paid in cash and the rest accrued as Accounts Payable.
Requirements:
Determine cost of goods sold and ending inventory for April assuming a periodic inventory system under (a) LIFO, (b) FIFO, and (c) weighted average inventory costing methods.
Units available for sale
Number of units
Price per unit
Total cost
Beginning Inventory
125
$154
$19,250
April 6 purchase
65
$160
$10,400
April 19 purchase
90
$164
$14,760
Total
280
$44,410
Average cost per unit
280
(?????)
Units sold =50 + 50 + 105 = 205 units
Units in ending inventory = 280 205 = 75
Inventory method
Number of units
Cost(s) per unit
Total cost applied
LIFO
Ending inventory
Cost of goods sold
Total cost of goods sold
Inventory method
Number of units
Cost(s) per units
Total cost applied
FIFO
Ending inventory
Cost of goods sold
Total cost of goods sold
Inventory method
Number of units
Cost(s) per unit
Total cost applied
Weighted average
Ending inventory
Cost of goods sold
Apr 6 Purchased 65 units @ $160 Apr 13 Sold 50 units @ $300 Apr 19 Purchased 90 units @ $164 Apr 25 Sold 50 units $300 Apr 29 Sold 105 units @ 300Explanation / Answer
Inventory method Number of units Cost(s) per unit Total cost applied FIFO Ending inventory 75 $164 $ 12,300 Cost of goods sold 50 $154 $ 7,700 50 $154 $ 7,700 25 $154 $ 3,850 65 $160 $ 10,400 15 $164 $ 2,460 Total cost of goods sold 205 $ 156.63 $ 32,110 Under FIFO Opening Stock Purchases Sales Closing Stock 1st Apr 125* $154 = $19250 125* $154 = $19250 6 th Apr 125* $154 = $19250 65* $160= $10,400 125* $154 = $19250 65* $160= $10,400 13th Apr 125* $154 = $19250 50 * $154= $7700 75* $154= $11,550 65* $160= $10,400 65* $160= $10,400 19th Apr 75* $154= $11,550 90* $164= $14,760 75* $154= $11,550 65* $160= $10,400 65* $160= $10,400 90* $164= $14,760 25th Apr 75* $154= $11,550 50* $154= $7700 25* $154= $3850 65* $160= $10,400 65* $160= $10,400 90* $164= $14,760 90* $164= $14,760 29th Apr 25* $154= $3850 75* $164= $12300 65* $160= $10,400 15* $164 = $2460 Inventory method Number of units Cost(s) per unit Total cost applied LIFO Ending inventory 75 $154 $ 11,550 Cost of goods sold 50 $160 $ 8,000 50 $164 $ 8,200 40 $164 $ 6,560 15 $160 $ 2,400 50 $154 $ 7,700 Total cost of goods sold 205 $ 160.29 $ 32,860 LIFO Opening Stock Purchases Sales Closing Stock 1st Apr 125* $154 = $19250 125* $154 = $19250 6 th Apr 125* $154 = $19250 65* $160= $10,400 125* $154 = $19250 65* $160= $10,400 13th Apr 125* $154 = $19250 50 * $160= $8000 125* $154 = $19250 65* $160= $10,400 15* $160= $2400 19th Apr 125* $154 = $19250 90* $164= $14760 125* $154 = $19250 15* $160= $2400 15* $160= $2400 90* $164= $14760 25th Apr 125* $154 = $19250 50* $164= $8200 125* $154 = $19250 15* $160= $2400 15* $160= $2400 90* $164= $14760 40* $164= $6560 29th Apr 125* $154 = $19250 40* $164= $6560 75* $154= $11550 15* $160= $2400 15* $160= $2400 40* $164= $6560 50* $154 = $770 Inventory method Number of units Cost(s) per unit Total cost applied Weighted Avg Ending inventory 75 $ 159.13 $ 11,934 Cost of goods sold 50 $ 156.05 $ 7,803 50 $ 159.16 $ 7,958 105 $ 159.13 $ 16,708 Total cost of goods sold 205 $ 158.38 $ 32,469 Weighted Avg Opening Stock Purchases Sales Closing Stock 1st Apr 125* $154 = $19250 125* $154 = $19250 6 th Apr 125* $154 = $19250 65* $160= $10,400 190* $156.0526= $29650 13th Apr 190* $156.0526= $29650 50 * $156.0526= $7802.632 140* $156.0526= $21847.37 19th Apr 140* $156.0526= $21847.37 90* $164= $14760 230* $159.1625= $ 36607.37 25th Apr 230* $159.1625= $ 36607.37 50* $159.1625= $7958.124 180* $ 159.1625= $ 28649.25 29th Apr 180* $ 159.1625= $ 28649.25 105* $159.125= $ 16712.06 75* $159.125= $11937.19
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