Question

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- 50 units at $94
Mar 10. Purchase- 70 units at $106
Aug 30. Purchase- 20 units at $114
Dec 12. Purchase- 60 units at $120

There are 60 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.

First-in, first-out (FIFO) :
Merchandise Inventory=
Merchandise Sold=

Last-in, first-out (LIFO) :
Merchandise Inventory=
Merchandise Sold=

Weighted average cost :
Merchandise Inventory=
Merchandise Sold=

Answer 1

Answer---

	FIFO	LIFO	Weighted Average
Ending Inventory	$               7,200	$                5,760	$                6,480
Cost of merchandise Sold	$      14,400.00	$       15,840.00	$              15,120

Working

	Units	Cost per unit	value
Beginning Balance	50	$                94.00	$          4,700.00
Purchases
10-Mar	70	$             106.00	$          7,420.00
30-Aug	20	$             114.00	$          2,280.00
12-Dec	60	$             120.00	$          7,200.00
	200		$        21,600.00

Average Cost of Inventory
Units	(A)	200
Total Cost	(B)	$       21,600.00
Average Cost	(C=B/A)	$             108.00

FIFO
Total Units Avalable for sale		200
Units Sold		140
Closing Stock in Units		60
Valuation
Ending Inventory	60	@	$              120.00	$    7,200.00
Value Of Ending Inventory				$    7,200.00
Cost of Goods sold	(21600-7200)			$ 14,400.00

LIFO
Total Units Avalable for sale		200
Units Sold		140
Closing Stock in Units		60
Valuation
Ending Inventory	50	@	$                94.00	$    4,700.00
	10		$              106.00	$    1,060.00
Value Of Ending Inventory				$    5,760.00
Cost of Goods sold	(21600-5760)			$ 15,840.00

Weighted Average method
Total Units Avalable for sale		200
Units Sold		140
Closing Stock in Units		60
Valuation
Ending Inventory	60	@	$              108.00	$          6,480
Value Of Ending Inventory				$          6,480
Cost of Goods sold	(Total Purchase and opening stock Minus Closing Stock)			$ 15,120.00