Question

Sandra’s Purse Boutique has the following transactions related to its top-selling Gucci purse for the month of October. Sandra's Purse Boutique uses a periodic inventory system.

Date	Transactions	Units	Cost per Unit	Total Cost
October 1	Beginning inventory	6	$760	$ 4,560
October 4	Sale	4
October 10	Purchase	5	770	3,850
October 13	Sale	3
October 20	Purchase	4	780	3,120
October 28	Sale	7
October 30	Purchase	8	790	6,320
				$17,850

1. Calculate ending inventory and cost of goods sold at October 31, using the specific identification method. The October 4 sale consists of purses from beginning inventory, the October 13 sale consists of one purse from beginning inventory and two purses from the October 10 purchase, and the October 28 sale consists of three purses from the October 10 purchase and four purses from the October 20 purchase.

2. Using FIFO, calculate ending inventory and cost of goods sold at October 31.

3. Using LIFO, calculate ending inventory and cost of goods sold at October 31.
4. Using weighted-average cost, calculate ending inventory and cost of goods sold at October 31. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

Answer 1

Hi,

I have answered all parts of the question along with the calculation. Hope this helps!

Answer Summary	Inventory $	COGS $
Specific Sales	$                    7,080	$          10,770
FIFO	$                    7,100	$          10,750
LIFO	$                    6,870	$          10,980
Weighted Avg	$              6,984.78	$    10,865.22
(Refer calculations below)
Date	Transactions	Units	Cost per Unit	Total Cost
October 1	Beginning inventory	6	$760	$ 4,560
October 4	Sale	4
October 10	Purchase	5	770	3,850
October 13	Sale	3
October 20	Purchase	4	780	3,120
October 28	Sale	7
October 30	Purchase	8	790	6,320
				$17,850
Total units purchased		23
Total units sold		14
Closing stock		9
1) Calculation based on specific identification method
				Quantity		Value
Date	Units	Rate	Total Cost	Units Sold (specific dates used)	Closing inventory	COGS	Inventory
October 1	6	$                760	$             4,560	5	1	$             3,800	$                    760
October 10	5	$                770	$             3,850	5	-	$             3,850	$                        -
October 20	4	$                780	$             3,120	4	-	$             3,120	$                        -
October 30	8	$                790	$             6,320	-	8	$                    -	$                 6,320
						$           10,770	$                 7,080
2) Calculation based on FIFO				Quantity		Value
Date	Units	Rate	Total Cost	Units sold based on FIFO	Closing inventory	COGS	Closing value
October 1	6	$                760	$             4,560	6	-	$             4,560	$                        -
October 10	5	$                770	$             3,850	5	-	$             3,850	$                        -
October 20	4	$                780	$             3,120	3	1	$             2,340	$                    780
October 30	8	$                790	$             6,320	-	8	$                    -	$                 6,320
				14	9	$           10,750	$                 7,100
3) Calculation based on LIFO				Quantity		Value
Date	Units	Rate	Total Cost	Units sold based on LIFO	Closing inventory	COGS	Closing value
October 1	6	$                760	$             4,560	-	6	$                    -	$                 4,560
October 10	5	$                770	$             3,850	2	3	$             1,540	$                 2,310
October 20	4	$                780	$             3,120	4	-	$             3,120	$                        -
October 30	8	$                790	$             6,320	8	-	$             6,320	$                        -
				14	9	$           10,980	$                 6,870
4) Calculation based on Weighted Average
Date	Units	Rate	Total Cost
October 1	6	$                760	$             4,560
October 10	5	$                770	$             3,850
October 20	4	$                780	$             3,120
October 30	8	$                790	$             6,320
	23		$          17,850
Weighted Average Cost per unit:		$            776.1
(Total Cost $17,850/Total units 23)
Cost of inventory sold (14 units)		$    10,865.22
Closing inventory (9 units)		$      6,984.78

Please do rate my answer and good luck!

Regards

D