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Question 5 Pronghorn Corporation uses a perpetual inventory system. On November 19, the company sold 610...

Question 5

Pronghorn Corporation uses a perpetual inventory system. On November 19, the company sold 610 units. The following additional information is available:
Units Unit
Cost		 Total
Cost
Nov. 1 inventory 330 $12 $3,960
Nov. 15 purchase 480 14 6,720
Nov. 23 purchase 360 16 5,760
1,170 $16,440
Calculate the November 30 inventory and the November cost of goods sold, using the moving average cost formula. (Round unit cost to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places. e.g. 5,275.)
Cost of Goods Sold $
Ending Inventory $

Calculate the November 30 inventory and the November cost of goods sold, using the FIFO cost formula.

Cost of Goods Sold $
Ending Inventory $

Solutions

Expert Solution

Solution:
Moving Average cost method - perpetual inventory
Date                       Purchases                          Sales                       Balance
Unit Rate Cost Unit Rate Cost Unit Rate Cost
Nov 1, 330 $12 $3,960
Nov 15, 480 $14 $6,720 810 $13.19 $10,680
Nov 19, 610 $13.19 $8,046 200 $13.19 $2,638
Nov , 23 360 $16 $5,760 560 $15 $8,398
Cost of goods sold = $8,046
Ending Inventory = $8,398
FIFO method - perpetual inventory
Date                       Purchases                          Sales                       Balance
Unit Rate Cost Unit Rate Cost Unit Rate Cost
Nov 1, 330 $12 $3,960
Nov 15, 480 $14 $6,720 330 $12 $3,960
480 $14 $6,720
Nov 19, 330 $12 $3,960
280 $14 $3,920 200 $14 $2,800
Nov , 23 360 $16 $5,760 200 $14 $2,800
360 $16 $5,760
Cost of goods sold = $3,960 + $3,920 = $7,880
Ending Inventory = $2,800 + $5,760 = $8,560
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ekkarill92 answered 2 years ago
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