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Kingsley Company uses the periodic inventory system to account for its inventories. Here are Kingsley’s inventory...

Kingsley Company uses the periodic inventory system to account for its inventories. Here are Kingsley’s inventory records for January and February of 2017:

Date	Event	Quantity	Cost per unit	Total Cost
January 1	Inventory on hand	15 units	$10/unit	$150
8	Purchase	20 units	$11/unit	$220
12	Purchase	40 units	$12/unit	$480
29	Purchase	50 units	$13/unit	$650
31	Ending inventory	20 units	?	?
February 8	Purchase	15 units	$14/unit	$210
15	Purchase	40 units	$15/unit	$600
22	Purchase	25 units	$16/unit	$400
28	Ending Inventory	24 units	?	?

Assume that Kingsley has consistently used the FIFO method. Compute the total cost of the 24 units in the ending inventory as of February 28, and compute the cost of goods sold for the month of February (only).
Assume that Kingsley has consistently used the LIFO method. Compute the total cost of the 24 units in the ending inventory as of February 28, and compute the cost of goods sold for the month of February (only).
Assume that Kingsley has consistently used the Weighted Average Cost method. Compute the total cost of the 24 units in the ending inventory as of February 28, and compute the cost of goods sold for the month of February (only).

Expert Solution

1. FIFO:

Beginning inventory as on Feb 1 = 20*$13 = $260

Sales units for Feb = 20+15+40+25-24 = 76 units

Ending inventory = 24*$16 = $384

Cost of goods sold = Cost of goods available for sale - Ending inventory

Cost of goods available for sale = $260+210+600+400 = $1,470

Cost of goods sold = $1,470 - 384 = $1,086

2. LIFO:

Beginning inventory as on Feb 1 = 15*$10 + 5*$11 = $205

Sales units for Feb = 20+15+40+25-24 = 76 units

Ending inventory = $205 + 4*$14 = 261

Cost of goods sold = Cost of goods available for sale - Ending inventory

Cost of goods available for sale = $205+210+600+400 = $1,415

Cost of goods sold = $1,415 - 261 = $1,154

3.

Weighted average cost per unit (January ) = $150+220+480+650 / 125 = $12 per unit

Ending inventory as on January = 20*$12 = $240

Weighted average cost per unit (February) = $240+210+600+400 / 100 = $14.5

Ending inventory (February 28) = 24*$14.5 = $348

Cost of goods sold = 76*$14.5 = $1,102

ekkarill92 answered 2 years ago

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