Question

Flora's Gifts reported the following current-month data for its only product. The company uses a periodic inventory system, and its ending inventory consists of 90 units—65 units from the January 6 purchase and 25 units from the January 25 purchase. Jan. 1 Beginning inventory 210 units @ $4.50 = $ 945.00 Jan. 6 Purchase 385 units @ $4.30 = 1,655.50 Jan. 17 Purchase 615 units @ $3.80 = 2,337.00 Jan. 25 Purchase 37 units @ $3.50 = 129.50 Totals 1,247 units $ 5,067.00 Determine the cost assigned to ending inventory and to cost of goods sold for the following.

	Ending Inventory Cost of Goods Sold (a) Specific identification (b) Weighted average (c) FIFO (d) LIFO

Answer 1

	a)			Specific Identification
			Ending Inventory						Cost of Goods Sold
		Date	Units	Units Cost	Total Cost			Cost of Goods available for sales			$5,067
		Jan-06	65	$4.30	$279.50			Less: Ending Inventory			$367
		Jan-25	25	$3.50	$87.50						$4,700
			90		$367
	b)			Average-Cost
			Ending Inventory						Cost of Goods Sold
	Average cost= Total cost of goods available for sales/ total number of units available for sales							Cost of Goods available for sales			$5,067
								Less: Ending Inventory			$365.40
	=	$5,067 / 1247= $4.06									$4,701.60
		Units	Units Cost	Total Costs
		90	$4.06	$365.40
	c)			FIFO
			Ending Inventory						Cost of Goods Sold
		Date	Units	Units Cost	Total Cost			Cost of Goods available for sales			$5,067
		Jan-25	37	$3.50	$129.50			Less: Ending Inventory			$330.90
		Jan-17	53	$3.80	$201.40						$4,736.10
			90		$330.90
	d)			LIFO
			Ending Inventory						Cost of Goods Sold
		Date	Units	Units Cost	Total Cost			Cost of Goods available for sales			$5,067
		Jan-01	90	$4.50	$405			Less: Ending Inventory			$405
											$4,662
			90		$405