Question

VanderMeer Inc. reported the following information for the month of February:

Inventory, February 1		57 units @ $20
Purchase:
February 7		48 units @ $22
February 18		67 units @ $24
February 27		38 units @ $26

During February, VanderMeer sold 136 units. The company uses a periodic inventory system.

Required:

What is the value of ending inventory and cost of goods sold for February under the following assumptions.

Assumption	Cost of Goods Sold	Ending Inventory
1. Of the 136 units sold, 48 cost $20, 34 cost $22, 50 cost $24, and 4 cost $26.	$	$
2. FIFO	$	$
3. LIFO	$	$
4. Weighted average method (Round average unit cost to the nearest cent, and round all other calculations and your final answers to the nearest dollar.)	$	$

Answer 1

Solution

1. Of the 136 units sold, 48 cost $20, 34 cost $22, 50 cost $24, and 4 cost $26

Particulars	Units	Cost
Opening Balance	57	1140
Add: Purchase
7-Feb	48	1056
18-Feb	67	1608
27-Feb	38	988
	210	4792
Less : Sales	48	960
	34	748
	50	1,200
	4	104
	136	3,012
Balance	9	180
	14	308
	17	408
	34	884
	74	1,780

2.FIFO

Particulars	Units	Cost
Opening Balance	57	1140
Add: Purchase	0	0
7-Feb	48	1056
18-Feb	67	1608
27-Feb	38	988
	210	4792
Less : Sales	57	1,140
	48	1,056
	31	744
	136	2,940
Balance	36	864
	38	988
	74	1,852

3.LIFO

Particulars	Units	Cost
Opening Balance	57	1140
Add: Purchase	0	0
7-Feb	48	1056
18-Feb	67	1608
27-Feb	38	988
	210	4792
Less : Sales	31	682
	67	1,608
	38	988
	136	3,278
Balance	57	1,140
	17	374
	74	1,514

4.Weighted average method

Particulars	Units	Cost
Opening Balance	57	1140
Add: Purchase	0	0
7-Feb	48	1056
18-Feb	67	1608
27-Feb	38	988
	210	4792
Less : Sales	136	3,103
	136	3,103
Balance	74	1,689
	74	1,689

Note : Calculation of weighted average cost = Total cot of goods purchased / Total Number of units

= 4792/210

=22.82