Question

Based on the following information, calculate the cost of goods sold and ending inventory using FIFO, LIFO, and weighted average assuming a perpetual inventory system is in place.

Beginning Balance - 90 units at $11

March 3 - Purchase 300 units for $15

April 4 - Sell 240 units for $28

June 30 - Purchase 250 units for $18

August 16 - Sell 180 units for $30

Answer 1

calculation of cost of goods sold and ending inventory using following method :

1) fifo method :

date	acrtivities	no. of units purchased	rate per unit purchased in $	no. of units sold	cost per unit sold	cost of goods sold in $	no. of units in ending inventory	rate per unit of ending inventory	total ending inventory in $
1st day of period	beginning balance	90	11				90	11	990
march 3	purchase	300	15				90	11	990
							300	15	4500
april 4	sell			90	11	990	150	15	2250
				150	15	2250
june 30	purchase	250	18				150	15	2250
							250	18	4500
august 16	sell			150	15	2250	220	18	3960
				30	18	540
	total cst of goods sold and ending inventory			420		6030	220		3960

2) lifo method :

date	acrtivities	no. of units purchased	rate per unit purchased in $	no. of units sold	cost per unit sold	cost of goods sold in $	no. of units in ending inventory	rate per unit of ending inventory	total ending inventory in $
1st day of period	beginning balance	90	11				90	11	990
march 3	purchase	300	15				90	11	990
							300	15	4500
april 4	sell			240	15	3600	90	11	990
							60	15	900
june 30	purchase	250	18				90	11	990
							60	15	900
							250	18	4500
august 16	sell			180	18	3240	90	11	990
							60	15	900
							70	18	1260
	total cost of goods sold and ending inventory			420		6840	220		3150

3) weighted average method :

date	acrtivities	no. of units purchased	rate per unit purchased in $	no. of units sold	cost per unit sold	cost of goods sold in $	no. of units in ending inventory	average cost per unit	total ending inventory in $
1st day of period	beginning balance	90	11				90	11	990
march 3	purchase	300	15				90 + 300 = 390	(990+4500)/390 = 14.0769	5490
april 4	sell			240	14.0769	3378.456	150	14.0769	2111.544
june 30	purchase	250	18				150 + 250 = 400	(2111.544+4500)/400 = 16.52886	6611.544
august 16	sell			180	16.52886	2975.1948	220	16.52886	3636.3492
	total cost of goods sold and ending inventory			420		6353.6508	220		3636.3492

perpetual method	cost of goods sold	ending inventory
fifo	$6030	$3960
lifo	$6840	$3150
weighted average	$6353.6508	$3636.3492

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