Question

Applying and Analyzing Inventory Costing Methods
At the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $32. A summary of purchases during the current period follows.

	Units	Unit Cost	Cost
Beginning Inventory	1,000	$32	$32,000
Purchase #1	1,800	34	61,200
Purchase #2	800	38	30,400
Purchase #3	1,200	41	49,200

During the current period, Chen sold 2,800 units.

(a) Assume that Chen uses the first-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance. Use the financial statement effects template to record cost of goods sold for the period.
Ending inventory balance $Answer

Cost of goods sold              $Answer

Use negative signs with answers, when appropriate.

	Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
Record FIFO cost of goods sold	Answer		Answer		Answer		Answer		Answer

Income Statement
Revenue	-	Expenses	=	Net Income
Answer		Answer		Answer

(b) Assume that Chen uses the last-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance.
Ending inventory balance  $Answer

Cost of goods sold              $Answer

(c) Assume that Chen uses the average cost method. Compute both cost of good sold for the current period and the ending inventory balance.
Ending inventory balance $Answer

Cost of goods sold              $Answer

please show work  

Answer 1

FIFO Method
Date	Qty.	Rate	Value
Opening Stock	1,000	$32.00	$32,000.00
Purchase 1	1,800	$34.00	$61,200.00
Purchase 2	800	$38.00	$30,400.00
Purchase 3	1,200	$41.00	$49,200.00
Total avilable stock for sale	4,800		$172,800.00
Less: Sale
Sales	1000	$32.00	$32,000.00
Sales	1800	$34.00	$61,200.00
Cost of Goods Sold	2800		$93,200.00
Closing Stock	2,000		$79,600.00
LIFO Method
Date	Qty.	Rate	Value
Opening Stock	1,000	$32.00	$32,000.00
Purchase 1	1,800	$34.00	$61,200.00
Purchase 2	800	$38.00	$30,400.00
Purchase 3	1,200	$41.00	$49,200.00
Total avilable stock for sale	4,800		$172,800.00
Less: Sale
Sales	1200	$41.00	$49,200.00
Sales	800	$38.00	$30,400.00
Sales	800	$34.00	$27,200.00
Cost of Goods Sold	2800		$106,800.00
Closing Stock	2,000		$66,000.00
Average Method
Date	Qty.	Rate	Value
Opening Stock	1,000	$32.00	$32,000.00
Purchase 1	1,800	$34.00	$61,200.00
Purchase 2	800	$38.00	$30,400.00
Purchase 3	1,200	$41.00	$49,200.00
Total avilable stock for sale	4,800	$36.00	$172,800.00
Less: Sale
Sales	2800	$36.00	$100,800.00
Cost of Goods Sold	2800		$100,800.00
Closing Stock	2,000		$72,000.00