Question

Question text

Inventory Costing Methods—Perpetual Method

Chou Sales Corporation uses the perpetual inventory system. On January 1, 2018, Chen had 1,000 units of product A with a unit cost of $20 per unit. A summary of purchases and sales during 2018 follows:

	Unit Cost	Units Purchased	Units Sold
Feb.2			400
Apr.6	$22	1,800
July 10			1,600
Aug.9	25	800
Oct.23			800
Dec.30	28	1,400

Required
a. Assume that Chou uses the first-in, first-out method. Compute the cost of goods sold for 2018 and the ending inventory balance at December 31, 2018, for product A.

b. Assume that Chou uses the last-in, first-out method. Compute the cost of goods sold for 2018 and the ending inventory balance at December 31, 2018, for product A.

c. Assume that Chou uses the weighted-average cost method. Compute the cost of goods sold for 2018 and the ending inventory balance at December 31, 2018, for product A. Do not round until your final answers. Round to the nearest dollar.

a.	First-In, First-Out
	Ending Inventory	Answer Correct Mark 1.00 out of 1.00
	Cost of goods Sold	Answer Correct Mark 1.00 out of 1.00
b.	Last-In, First-Out
	Ending Inventory	Answer Incorrect Mark 0.00 out of 1.00
	Cost of Goods Sold	Answer Incorrect Mark 0.00 out of 1.00
c.	Weighted Average
	Ending Inventory	Answer Incorrect Mark 0.00 out of 1.00
	Cost of Goods Sold	Answer Incorrect Mark 0.00 out of 1.00

Answer 1

a.	First In First Out
	Ending Inventory	$ 59,200
	Cost of Goods Sold	59,600
b.	Last In First Out
	Ending Inventory	$ 55,600
	Cost of Goods Sold	63,200
c.	Weighted Average
	Ending Inventory	$ 57,800
	Cost of Goods Sold	61,000

a. Perpetual Inventory: FIFO

Date	Purchases			Cost of Goods Sold			Ending Inventory
	Units	Unit Cost	Amount	Units	Unit Cost	Amount	Units	Unit Cost	Amount
Jan 1, 2018							1,000	$ 20	$20,000
Feb 2				400	$ 20	$ 8,000
Apr 6	1,800	$ 22	$39,600				600 1,800	20 22	12,000 39,600
July 10				600 1,000	20 22	12,000 22,000	800	22	17,600
Aug 9	800	25	20,000				800 800	22 25	17,600 20,000
Oct 23				800	22	17,600	800	25	20,000
Dec 30	1,400	28	39,200				800 1,400	25 28	20,000 39,200
Totals	4,000		98,800	2,800		59,600	2,200		59,200

b. Perpetual Inventory : LIFO

Date	Purchases			Cost of Goods Sold			Ending Inventory
	Units	Unit Cost	Amount	Units	Unit Cost	Amount	Units	Unit Cost	Amount
Jan 1							1,000	$ 20	$20,000
Feb 2				400	$ 20	$ 8,000	600	20	12,000
Apr. 6	1,800	$ 22	$39,600				600 1,800	20 22	12,000 39,600
July 10				1,600	22	35,200	600 200	20 22	12,000 4,400
Aug 9	800	25	20,000				600 200 800	20 22 25	12,000 4,400 20,000
Oct 23				800	25	20,000	600 200	20 22	12,000 4,400
Dec 30	1,400	28	39,200				600 200 1,400	20 22 28	12,000 4,400 39,200
Totals	4,000		98,800	2,800		63,200	2,200		55,600

c. Perpetual Inventory : Weighted Average

Date	Purchases			Cost of Goods Sold			Ending Inventory
	Units	Unit Cost	Amount	Units	Unit Cost	Amount	Units	Unit Cost	Amount
Jan 1							1,000	$ 20	$20,000
Feb 2				400	$ 20	$ 8,000	600	20	12,000
Apr 6	1,800	$ 22	$39,600				600 1,800		12,000 39,600
							2,400	21.50	51,600
July 10				1,600	21.50	34,400	800	21.50	17,200
Aug 9	800	25	20,000				800 800		17,200 20,000
							1,600	23.25	37,200
Oct 23				800	23.25	18,600	800	23.25	18,600
Dec 30	1,400	28	39,200				800 1,400		18,600 39,200
	4,000		98,800	2,800		61,000	2,200	26.27	57,800