Question

Maple company uses the periodic inventory system. The beginning balance of inventory and subsequent inventory purchases made by the company during the month of March 2019 are given below:
• March 01: Beginning inventory, 450 units @ $18 per unit.
• March 18: Inventory purchased, 600 units @ $20 per unit.
• March 25: Inventory purchased, 700 units @ $26 per unit.
The Mark company sold 1,300 units during the month of March.
Required:
Calculate the cost of goods sold and ending inventory on March 31, 2019 using the following inventory costing methods:
1. First in, first out (FIFO) method
2. Weighted Average cost method

Answer 1

Solution:
FIFO Method
		COST OF GOODS AVAILABLE FOR SALE	COST OF GOODS SOLD	ENDING INVENTORY
Date	Particulars	No. of Units	Cost Per unit	Total	No. of Units	Cost Per unit	Cost of Goods Sold	No. of Units	Cost Per unit	Ending invetory
March, 01	Beginning inventory	450	$             18.00	$8,100	450	$         18.00	$8,100
Purchases:
March, 18	Purchases	600	$             20.00	$12,000	600	$         20.00	$12,000
March, 25	Purchases	700	$             26.00	$18,200	250	$         26.00	$6,500	450	$         26.00	$11,700
	Total Goods Available/ Cost of Goods Sold	1,750		$38,300	1,300		$26,600	450		$11,700
Weighted Average Cost Method
		COST OF GOODS AVAILABLE FOR SALE	COST OF GOODS SOLD	ENDING INVENTORY
Date	Particulars	No. of Units	Cost Per unit	Total	No. of Units	Cost Per unit	Cost of Goods Sold	No. of Units	Cost Per unit	Ending invetory
March, 01	Beginning inventory	450	$             18.00	$8,100
Purchases:
March, 18	Purchases	600	$             20.00	$12,000
March, 25	Purchases	700	$             26.00	$18,200
	Total Goods Available/ Cost of Goods Sold	1,750	$21.89	$38,300	1,300	$21.89	$28,457	450	$21.89	$9,851
Answer 1 & 2		FIFO	Weighted Average Cost Method
	Cost of Goods Sold	$26,600	$28,457
	Ending inventory	$11,700	$9,851