Question

Shown below is activity for one of the products of Weasel:

January 1 balance, 220 units at $50 for a total of $11,000

Purchases: January 10-200 units at $42

                     January 20-500 units at $55

Sales: January 12-350 units

             January 28-425 units

a. Compute the ending inventory and cost of goods sold assuming Weasel uses FIFO.

b. Compute the ending inventory and cost of goods sold assuming Weasel uses LIFO and perpetual inventory system.

c. Compute the ending inventory and cost of goods sold assuming Weasel uses average cost and a perpetual inventory system.

d. Compute the ending inventory and cost of goods sold assuming Weasel uses LIFO and a periodic inventory system.

e. Compute the ending inventory and costs of goods sold assuming Weasel uses average cost and periodic inventory system.

Please Show all Work

Answer 1

Solution a:

Computation of ending inventory COGS under FIFO
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	220	$50.00	$11,000.00	0	$0.00	$0.00	0	$0.00	$0.00	220	$50.00	$11,000.00
10-Jan	220	$50.00	$11,000.00	200	$42.00	$8,400.00	0	$0.00	$0.00	220	$50.00	$11,000.00
										200	$42.00	$8,400.00
12-Jan	220	$50.00	$11,000.00	0	$0.00	$0.00	220	$50.00	$11,000.00	70	$42.00	$2,940.00
	200	$42.00	$8,400.00				130	$42.00	$5,460.00
20-Jan	70	$42.00	$2,940.00	500	$55.00	$27,500.00	0	$0.00	$0.00	70	$42.00	$2,940.00
										500	$55.00	$27,500.00
28-Jan	70	$42.00	$2,940.00	0	$0.00	$0.00	70	$42.00	$2,940.00	145	$55.00	$7,975.00
	500	$55.00	$27,500.00				355	$55.00	$19,525.00
Total							775		$38,925.00	145		$7,975.00

Solution b:

Computation of ending inventory COGS under LIFO
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	220	$50.00	$11,000.00	0	$0.00	$0.00	0	$0.00	$0.00	220	$50.00	$11,000.00
10-Jan	220	$50.00	$11,000.00	200	$42.00	$8,400.00	0	$0.00	$0.00	220	$50.00	$11,000.00
										200	$42.00	$8,400.00
12-Jan	220	$50.00	$11,000.00	0	$0.00	$0.00	200	$42.00	$8,400.00	70	$50.00	$3,500.00
	200	$42.00	$8,400.00				150	$50.00	$7,500.00
20-Jan	70	$50.00	$3,500.00	500	$55.00	$27,500.00	0	$0.00	$0.00	70	$50.00	$3,500.00
										500	$55.00	$27,500.00
28-Jan	70	$50.00	$3,500.00	0	$0.00	$0.00	425	$55.00	$23,375.00	70	$50.00	$3,500.00
	500	$55.00	$27,500.00							75	$55.00	$4,125.00
Total							775		$39,275.00	145		$7,625.00

Solution c:

Computation of ending inventory COGS under Average Cost
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	220	$50.00	$11,000	0	$0.00	$0	0	$0.00	$0	220	$50.00	$11,000
10-Jan	220	$50.00	$11,000	200	$42.00	$8,400	0	$0.00	$0	420	$46.19	$19,400
12-Jan	420	$46.19	$19,400	0	$0.00	$0	350	$46.19	$16,167	70	$46.19	$3,233
20-Jan	70	$46.19	$3,233	500	$55.00	$27,500	0	$0.00	$0	570	$53.92	$30,733
28-Jan	570	$53.92	$30,733	0	$0.00	$0	425	$53.92	$22,915	145	$53.92	$7,818
Total							775		$39,082	145		$7,818

Solution d:

Computation of COGS and ending inventory - Periodic LIFO
Particulars	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	220	$50.00	$11,000	75	$50.00	$3,750.00	145	$50.00	$7,250.00
Purchases:
10-Jan	200	$42.00	$8,400	200	$42.00	$8,400.00	0	$42.00	$0.00
20-Jan	500	$55.00	$27,500	500	$55.00	$27,500.00	0	$55.00	$0.00
Total	920		$46,900	775		$39,650.00	145		$7,250.00

Solution e:

Computation of COGS and ending inventory - Periodic Weighted Average cost method
Particulars	Cost of goods available for sale			Cost of goods sold - Average cost			Ending Inventory - Average cost
	Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	220	$50.00	$11,000
Purchases:
10-Jan	200	$42.00	$8,400
20-Jan	500	$55.00	$27,500
Total	920	$50.98	$46,900	775	$50.98	$39,508	145	$50.98	$7,392