In: Accounting
Jaywall Corporation, which uses a perpetual inventory system, recorded the following inventory transactions during 20X3.
Units |
Unit Cost |
Units |
Selling Price |
||
April 1 |
Beginning inventory |
45 |
$8 |
||
25 |
Purchase |
150 |
9 |
||
May 4 |
Purchase |
65 |
10 |
||
16 |
Sale |
120 |
$16 |
||
June 4 |
Purchase |
50 |
12 |
(a) Using the FIFO cost formula, calculate the amount
of the cost of goods sold for the quarter ended June 30. (Show
calculations)
(b) Using the average cost formula, calculate the amount of ending
inventory at June 30. (Show calculations)
Answer to a) COGS = $1035
Going by the FIFO method, Jaywall corporation needs to go by the older costs (of acquiring his inventory) first.
Jaywall corporation's, COGS is as follows
45*$8 + 75*$9 = $1035
Answer to b) Closing Stock = $1871
Purchases | Sales | Balance | ||||||
Date | Units | Unit Cost | Total | Units | Unit Cost | Total | Units | Unit Cost |
01-Apr | 45 | $ 8.00 | ||||||
25-Apr | 150 | $ 9.00 | $ 1,350.00 | 45 | $ 8.00 | |||
150 | $ 9.00 | |||||||
195 | $ 8.77 | |||||||
04-May | 65 | $ 10.00 | $ 650.00 | 195 | $ 8.77 | |||
65 | $ 10.00 | |||||||
260 | $ 9.08 | |||||||
16-May | 120 | $ 9.08 | $ 1,089.12 | 140 | $ 9.08 | |||
04-Jun | 50 | $ 12.00 | $ 600.00 | 140 | $ 9.08 | |||
50 | $ 12.00 | |||||||
190 | $ 9.85 |