Question

Larkspur Company is a multi product firm. Presented below is information concerning one of its products, the Hawkeye.

DATE	TRANSACTION	QUANTITY	PRICE/COST
1/1	BEGINNING INVENTORY	1,400	$14
2/4	PURCHASE	2,400	$21
2/20	SALE	2,900	$35
4/2	PURCHASE	3,400	$27
11/4	SALE	2,600	$38

Compute cost of goods sold, assuming Larkspur uses: (Round average cost per unit to 4 decimal places, e.g. 2.7631 and final answers to 0 decimal places, e.g. 6,548.) Calculate average-cost per unit. (Round answer to 4 decimal places, e.g. 2.7613.)  

Average-cost per unit $

Cost of goods sold

(a) Periodic system, FIFO cost flow $

(b) Perpetual system, FIFO cost flow $

(c) Periodic system, LIFO cost flow $

(d) Perpetual system, LIFO cost flow $

(e) Periodic system, weighted-average cost flow $

(f) Perpetual system, moving-average cost flow $

Answer 1

Soltuion a:

FIFO (Periodic)
Particulars	Units	Cost per unit	Total
Beginning Inventory	1400	$14.00	$19,600.00
Purchases:
4-Feb	2400	$21.00	$50,400.00
2-Apr	3400	$27.00	$91,800.00
Total Purchases	5800		$142,200.00
Goods available for Sale	7200		$161,800.00
Cost of goods sold:
Units from beginning inventory	1400	$14.00	$19,600.00
Units from Feb 4 purchase	2400	$21.00	$50,400.00
Units from Apr 2 purchase	1700	$27.00	$45,900.00
Total cost of goods sold	5500		$115,900.00
Ending Inventory	1700		$45,900.00

Solution b:

Computation of ending inventory and Issue cost under FIFO (Perpetual)
Date	Beginning Inventory			Purchase			Cost of goods sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	1400	$14.00	$19,600.00	0	$0.00	$0.00	0	$0.00	$0.00	1400	$14.00	$19,600.00
4-Feb	1400	$14.00	$19,600.00	2400	$21.00	$50,400.00	0	$0.00	$0.00	1400	$14.00	$19,600.00
										2400	$21.00	$50,400.00
20-Feb	1400	$14.00	$19,600.00	0	$0.00	$0.00	1400	$14.00	$19,600.00	900	$21.00	$18,900.00
	2400	$21.00	$50,400.00				1500	$21.00	$31,500.00
2-Apr	900	$21.00	$18,900.00	3400	$27.00	$91,800.00	0	$0.00	$0.00	900	$21.00	$18,900.00
										3400	$27.00	$91,800.00
4-Nov	900	$21.00	$18,900.00	0	$0.00	$0.00	900	$21.00	$18,900.00	1700	$27.00	$45,900.00
	3400	$27.00	$91,800.00				1700	$27.00	$45,900.00
Total							5500		$115,900.00	1700		$45,900.00

Solution c:

LIFO (Periodic)
Particulars	Units	Cost per unit	Total
Beginning Inventory	1400	$14.00	$19,600.00
Purchases:
4-Feb	2400	$21.00	$50,400.00
2-Apr	3400	$27.00	$91,800.00
Total Purchases	5800		$142,200.00
Goods available for Sale	7200		$161,800.00
Cost of goods sold:
Units from beginning inventory	0	$14.00	$0.00
Units from Feb 4 purchase	2100	$21.00	$44,100.00
Units from Apr 2 purchase	3400	$27.00	$91,800.00
Total cost of goods sold	5500		$135,900.00
Ending Inventory	1700		$25,900.00

Solution d:

Computation of ending inventory COGS under LIFO (Perpetual)
Date	Beginning Inventory			Purchase			Cost of Goods Sold			Ending Inventory
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	1400	$14.00	$19,600.00	0	$0.00	$0.00	0	$0.00	$0.00	1400	$14.00	$19,600.00
4-Feb	1400	$14.00	$19,600.00	2400	$21.00	$50,400.00	0	$0.00	$0.00	1400	$14.00	$19,600.00
										2400	$21.00	$50,400.00
20-Feb	1400	$14.00	$19,600.00	0	$0.00	$0.00	2400	$21.00	$50,400.00	900	$14.00	$12,600.00
	2400	$21.00	$50,400.00				500	$14.00	$7,000.00
2-Apr	900	$14.00	$12,600.00	3400	$27.00	$91,800.00	0	$0.00	$0.00	900	$14.00	$12,600.00
										3400	$27.00	$91,800.00
4-Nov	900	$14.00	$12,600.00	0	$0.00	$0.00	2600	$27.00	$70,200.00	900	$14.00	$12,600.00
	3400	$27.00	$91,800.00							800	$27.00	$21,600.00
Total							5500		$127,600.00	1700		$34,200.00

Solution e:

Weighted Average (Periodic)
Particulars	Units	Cost per unit	Total
Beginning Inventory	1400	$14.00	$19,600.00
Purchases:
4-Feb	2400	$21.00	$50,400.00
2-Apr	3400	$27.00	$91,800.00
Total Purchases	5800		$142,200.00
Goods available for Sale	7200	$22.4722	$161,800.00
Cost of goods sold	5500	$22.4722	$123,597
Ending Inventory	1700		$38,203

Solution f:

Computation of ending inventory COGS under Weighted Average Cost (Perpetual)
Date	Opening Stock			Receiving			Issue			Closing Stock
	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount	Qty	Rate	Amount
1-Jan	1400	$14.00	$19,600.00	0	$0.00	$0.00	0	$0.00	$0.00	1400	$14.00	$19,600.00
4-Feb	1400	$14.00	$19,600.00	2400	$21.00	$50,400.00	0	$0.00	$0	3800	$18.42	$70,000
20-Feb	3800	$18.42	$70,000	0	$0.00	$0	2900	$18.42	$53,421	900	$18.42	$16,579
2-Apr	900	$18.42	$16,579	3400	$27.00	$91,800	0	$0.00	$0	4300	$25.20	$108,379
4-Nov	4300	$25.20	$108,379	0	$0.00	$0	2600	$25.20	$65,531	1700	$25.20	$42,847
Total									$118,953			$42,847