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Ferris Company began 2018 with 6,000 units of its principal product. The cost of each unit...

Ferris Company began 2018 with 6,000 units of its principal product. The cost of each unit is $8. Merchandise transactions for the month of January 2018 are as follows:

Purchases
Date of Purchase Units Unit Cost* Total Cost
Jan. 10 5,000 $ 9 $ 45,000
Jan. 18 6,000 10 60,000
Totals 11,000 105,000

* Includes purchase price and cost of freight.

Sales
Date of Sale Units
Jan. 5 3,000
Jan. 12 2,000
Jan. 20 4,000
Total 9,000


8,000 units were on hand at the end of the month.

Required:
Calculate January's ending inventory and cost of goods sold for the month using each of the following alternatives:

1. FIFO, periodic system.
2. LIFO, periodic system.
3. LIFO, perpetual system.
4. Average cost, periodic system.
5. Average cost, perpetual system.

Solutions

Expert Solution

FIFO METHDO - PERIODICAL COST OF GOODS AVAILABLE FOR SALE COST OF GOODS SOLD CLOSING STOCK
Date Particulars Units Cost Per unit Total Units Cost Per unit Cost of Goods Sold Units Cost Per unit Ending inventory
Jan,01 Beginning Balance                          6,000 $                        8.00 $                    48,000                6,000 $           8.00 $           48,000
Jan,10 Purchases                          5,000 $                        9.00 $                    45,000                3,000 $           9.00 $           27,000                2,000 $           9.00 $           18,000
Jan,18 Purchases                          6,000 $                      10.00 $                    60,000                6,000 $         10.00 $           60,000
Total Goods Available For sale                        17,000 $                1,53,000                9,000 $           75,000                8,000 $           78,000
LIFO METHDO - PERIODICAL COST OF GOODS AVAILABLE FOR SALE COST OF GOODS SOLD CLOSING STOCK
Date Particulars Units Cost Per unit Total Units Cost Per unit Cost of Goods Sold Units Cost Per unit Ending inventory
Jan,01 Beginning Balance                          6,000 $                        8.00 $                    48,000                6,000 $           8.00 $           48,000
Jan,10 Purchases                          5,000 $                        9.00 $                    45,000                3,000 $           9.00 $           27,000                2,000 $           9.00 $           18,000
Jan,18 Purchases                          6,000 $                      10.00 $                    60,000                6,000 $         10.00 $           60,000
Total Goods Available For sale                        17,000 $                1,53,000                9,000 $           87,000                8,000 $           66,000
LIFO METHDO - PERPETUAL COST OF GOODS AVAILABLE FOR SALE COST OF GOODS SOLD CLOSING STOCK
Date Particulars Units Cost Per unit Total Units Cost Per unit Cost of Goods Sold Units Cost Per unit Ending inventory
Jan,01 Beginning Balance                6,000 $           8.00 $           48,000
Jan,05 Sales                3,000 $           8.00 $           24,000                3,000 $           8.00 $           24,000
Jan,10 Purchases                          5,000 $                        9.00 $                    45,000                3,000 $           8.00 $           24,000
               5,000 $           9.00 $           45,000
Jan,12 Sales                2,000 $           9.00 $           18,000                3,000 $           8.00 $           24,000
               2,000 $           9.00 $           18,000
Jan,18 Purchases                          6,000 $                      10.00 $                    60,000                3,000 $           8.00 $           24,000
               2,000 $           9.00 $           18,000
               6,000 $         10.00 $           60,000
Jan,20 Sales                4,000 $         10.00 $           40,000                3,000 $           8.00 $           24,000
               2,000 $           9.00 $           18,000
               2,000 $         10.00 $           20,000
Total Goods Available For sale                        11,000 $                1,05,000                5,000 $           42,000                7,000 $           62,000
AVERAGE COST - PERIODICAL COST OF GOODS AVAILABLE FOR SALE COST OF GOODS SOLD CLOSING STOCK
Date Particulars Units Cost Per unit Total Units Cost Per unit Cost of Goods Sold Units Cost Per unit Ending inventory
Jan,01 Beginning Balance                          6,000 $                        8.00 $                    48,000
Jan,10 Purchases                          5,000 $                        9.00 $                    45,000
Jan,18 Purchases

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