CP7-1 Analyzing the Effects of Four Alternative Inventory Costing Methods IL Scr

Question

CP7-1 Analyzing the Effects of Four Alternative Inventory Costing Methods IL Scrappers Supplies tracks the number of units purchased and sold throughout each accounting period but period, December 31 applies its inventory costing method at the end of each period, as if it uses a periodic inventory system Assume its accounting records provided the following information at the end of the annual accounting ransactions Units Unit Cost Beginning inventory, January 1 Transactions during the year: a. Purchase on account, March 2 b. Cash sale, April 1 ($44 each) c. Purchase on account, June 30 d. Cash sale, August 1 ($44 each) 180 $28 290 30 (330) 230 34 (55) TIP: Although the purchases and sales are listed in chronological order, Scrappers determines the cost of goods sold after all of the purchases have occurred. Required: December 31 under each of the following inventory costing methods: (Round "Cost per Unit" to 2 decimal places.) 1. Compute the cost of goods available for sale, cost of ending inventory, and cost of g a. Last-in, first-out

Explanation / Answer

Weighted Avg Cost Particulars Units Cost per unit Total Beginning Inventory 180 28 5040 Purchases 2-Mar 290 30 8700 Total 470 29.23 13740 Goods Issued -330 29.23 -9646 Balance 140 29.23 4094 Purchases 30Jun 230 34 7820 Total 370 32.2 11914 Sales -55 32.2 -1771 Closing Inventory 315 32.2 10143 *Cost per unit is of 29.23 is   derived from total cost 13740/total units 470 FIFO Particulars Units Cost Per unit Total Beginning Inventory 180 28 5040 Purchases 2nd march 290 30 8700 Purchases 30 june 230 34 7820 Less- Goods Issued 330 -330 180 units @ 28 -5040 150units @ 30 -4500 50 -55 55Units@30 -1650 Balance Closing inventory 315 85units@30 2550 230units @34 7820 Total Closing Inventory = 10370 Specific Identification Method Particulars Units Cost per unit Total Beginning Inventory 180 28 5040 Purchases 2-Mar 290 30 8700 30-Jun 230 34 7820 Total Purchases 520 16520 Goods Available for sale (opening +Purchases) 700 21560 Goods sold 330 -330 1/5 from opening 330/5=66@28 -1848 4/5 from 2nd march purchases 330*4/5=264@30 -7920 55 -55 From 30jun Purchases @34 -1870 Closing Inventory = 315 31.4984127 9922

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.