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Problem 8-5 (Algo) Various inventory costing methods [LO8-1, 8-4]

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Ferris Company began January with 7,000 units of its principal product. The cost of each unit is $6. Merchandise transactions for the month of January are as follows:

	Purchases
Date of Purchase	Units		Unit Cost*			Total Cost
Jan. 10	6,000		$	7			$	42,000
Jan. 18	7,000			8				56,000
Totals	13,000							98,000

* Includes purchase price and cost of freight.

Sales
Date of Sale	Units
Jan. 5	3,000
Jan. 12	1,000
Jan. 20	4,000
Total	8,000

12,000 units were on hand at the end of the month.

Problem 8-5 (Algo) Part 1

Required:
1. Calculate January's ending inventory and cost of goods sold for the month using FIFO, periodic system.

2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.
  

4. Calculate January's ending inventory and cost of goods sold for the month using Average cost, periodic system.

5. Calculate January's ending inventory and cost of goods sold for the month using Average cost, perpetual system. (Round average cost per unit to 4 decimal places. Enter sales with a negative sign.)
  

Answer 1

Ans. 1	Total units sold =   8,000
		Cost of goods available for sale	Cost of goods sold	Ending inventory
	FIFO:	# of Units	Cost per	Cost of goods	# of units	Cost per	Cost of	# of Units in	Cost per	Ending
			Unit	Available for sale	Sold	Unit	Goods sold	Ending inventory	Unit	Inventory
	Beginning inventory	7000	$6.00	$42,000	7000	$6.00	$42,000	0	$0.00	$0
	Purchases:
	10-Jan	6000	$7.00	$42,000	1000	$7.00	$7,000	5000	$7.00	$35,000
	18-Jan	7000	$8.00	$56,000	0	$0.00		7000	$8.00	$56,000
	Total	20000		$140,000	8000		$49,000	12000		$91,000
	*In FIFO method the units that have purchased first, are released the first one and the ending inventory units remain from the last purchases.
Ans. 2		Cost of goods available for sale	Cost of goods sold	Ending inventory
	LIFO:	# of Units	Cost per	Cost of goods	# of units	Cost per	Cost of	# of Units in	Cost per	Ending
			Unit	Available for sale	Sold	Unit	Goods sold	Ending inventory	Unit	Inventory
	Beginning inventory	7000	$6.00	$42,000	0	$0.00	$0	7000	$6.00	$42,000
	Purchases:
	10-Jan	6000	$7.00	$42,000	1000	$7.00	$7,000	5000	$7.00	$35,000
	18-Jan	7000	$8.00	$56,000	7000	$8.00	$56,000	0	$0.00	$0
	Total	20000		$140,000	8000		$63,000	12000		$77,000
	*In LIFO method the units that have purchased last, are released the first one and ending inventory units remains from the first purchases.