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Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an item available for...

Periodic Inventory by Three Methods; Cost of Merchandise Sold

The units of an item available for sale during the year were as follows:

Jan. 1 Inventory 40 units @ $114
Mar. 10 Purchase 70 units @ $124
Aug. 30 Purchase 30 units @ $128
Dec. 12 Purchase 60 units @ $132

There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.

Cost of Merchandise Inventory and Cost of Merchandise Sold
Inventory Method Merchandise Inventory Merchandise Sold
First-in, first-out (FIFO) $ $
Last-in, first-out (LIFO)
Weighted average cost

Solutions

Expert Solution

Cost of Merchandise Inventory and Cost of Merchandise Sold
Inventory Method Merchandise Inventory Merchandise Sold
First-in, first-out (FIFO)                           10,480.00               14,520.00
Last-in, first-out (LIFO)                             9,520.00               15,480.00
Weighted average cost                           10,000.00               15,000.00
First-in, first-out (FIFO)
Date Particulars Units   Cost Amount COGS
Jan 01 Beginning Inventory                       40.00                     114.00                 4,560.00
Mar 10 Purchase                       70.00                     124.00                 8,680.00
Aug 30 Purchase                       30.00                     128.00                 3,840.00
Dec 12 Purchase                       60.00                     132.00                 7,920.00
Total                     200.00               25,000.00
COGS                     120.00               14,520.00 40*114+70*124+10*128
Ending Inventory                         80.00               10,480.00 20*128 + 60*132
Last-in, first-out (LIFO)
Date Particulars Units   Cost Amount COGS
Jan 01 Beginning Inventory                       40.00                     114.00                 4,560.00
Mar 10 Purchase                       70.00                     124.00                 8,680.00
Aug 30 Purchase                       30.00                     128.00                 3,840.00
Dec 12 Purchase                       60.00                     132.00                 7,920.00
Total                     200.00               25,000.00
COGS                     120.00               15,480.00 60*132 + 30*128+30*124
Ending Inventory                         80.00                 9,520.00 40*124 + 40*114
Weighted average cost
Date Particulars Units   Cost Amount COGS
Jan 01 Beginning Inventory                       40.00                     114.00                 4,560.00
Mar 10 Purchase                       70.00                     124.00                 8,680.00
Aug 30 Purchase                       30.00                     128.00                 3,840.00
Dec 12 Purchase                       60.00                     132.00                 7,920.00
Total                     200.00                     125.00               25,000.00
COGS                     120.00               15,000.00 120*125
Ending Inventory                         80.00               10,000.00 80*125

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