Question

An organization reported the following:

	Units	$ per unit
Beginning Inventory	100	$2
1/1 Purchase on account	1200	$3
1/14 Sell 600 units on account for $8/each
1/22 Purchase on account	900	$4
1/29 Sell 850 units on account for $9/each

A. Prepare the journal entries for above (using FIFO). Find the ending inventory for 1/31 and gross profit for January.

B. Prepare the journal entries for above (using LIFO). Find the ending inventory for 1/31 and gross profit for January.

C. Prepare the journal entries for above (using weighted-average). Find the ending inventory for 1/31 and gross profit for January.

Answer 1

FIFO

Date	Receipts	Issues	Balance
	Qty Purchased	Per unit cost of purchases	Cost of goods purchased	Qty sold	Per unit cost of goods sold	Cost of goods sold	Ending inventory (units)	Per unit cost of ending inventory	Cost of ending inventory
1/1							100	2	200
1/1	1200	3	3600				100	2	200
							1200	3	3600
1/14				100	2	200	700	3	2100
				500	3	1500
1/22	900	4	3600				700	3	2100
							900	4	3600
1/29				700	3	2100	750	4	3000
				150	4	600
				1450		4400

Cost of goods sold: 4400

Ending Inventory: 3000

.

LIFO

Date	Receipts	Issues	Balance
	Qty Purchased	Per unit cost of purchases	Cost of goods purchased	Qty sold	Per unit cost of goods sold	Cost of goods sold	Ending inventory (units)	Per unit cost of ending inventory	Cost of ending inventory
1/1							100	2	200
1/1	1200	3	3600				100	2	200
							1200	3	3600
1/14				600	3	1800	100	2	200
							600	3	1800
1/22	900	4	3600				100	2	200
							600	3	1800
							900	4	3600
1/29				850	4	3400	100	2	200
							600	3	1800
							50	4	200
				1450		5200

Cost of goods sold: 5200

Ending Inventory: 2200

.

Weighted Average:

	Qty Purchased	Per unit cost of purchases	Cost of goods purchased	Qty sold	Per unit cost of goods sold	Cost of goods sold	Ending inventory (units)	Per unit cost of ending inventory	Cost of ending inventory
1/1							100	2	200
1/1	1200	3	3600				1300	2.92	3800
1/14				600	2.92	1753	700	2.92	2047
1/22	900	4	3600				1600	3.52	5647
1/29				850	3.52	3000	750	3.52	2647
				1450		4753

Cost of goods sold: 4753

Ending Inventory: 2647

.