Question

Samuelson and Messenger (S&M) began 2018 with 200 units of its one product. These units were purchased near the end of 2017 for $25 each. During the month of January, 100 units were purchased on January 8 for $28 each and another 200 units were purchased on January 19 for $30 each. Sales of 125 units and 100 units were made on January 10 and January 25, respectively. There were 275 units on hand at the end of the month. S&M uses a perpetual inventory system.

Required:
1. Complete the below table to calculate ending inventory and cost of goods sold for January using FIFO method.
2. Complete the below table to calculate ending inventory and cost of goods sold for January using average cost method.

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL FIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan							200	25	5000
8-Jan	100	28	2800				200	25	5000
							100	28	2800
10-Jan				125	25	3125	75	25	1875
							100	28	2800
19-Jan	200	30	6000				75	25	1875
							100	28	2800
							200	30	6000
25-Jan				75	25	1875	75	28	2100
				25	28	700	200	30	6000
TOTAL	300		8800	225		5700	275		8100
STATEMENT SHOWING INVENTORY RECORD UNDER PERPETUAL WEIGHTED AVERAGE METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan							200	25	5000
8-Jan	100	28	2800				200	25	5000
							100	28	2800
Average							300	26	7800
10-Jan				125	26	3250	175	26	4550
19-Jan	200	30	6000				175	26	4550
							200	30	6000
AVERAGE							375	28.13	10550
25-Jan				100	28.13	2813	275	28.13	7737
TOTAL	300		8800	225		6063	275	28.13	7737
			Ending	COGS
			Inventory
FIFO			8100	5700
Average			7737	6063