Question

Kyota Distribution markets CDs of the performing artists. Following information is available for the company.

Date	Explanation	Units	Unit cost	Total Cost
1st of March 2012	Beginning inventory	15,00	SR 7	SR 10500
5th March	Purchases	3,000	SR 8	24,000
13th March	Purchases	5,500	SR 9	49,500
21st march	Purchases	4,000	SR10	40,000
March 26	Purchases	2,000	SR 11	22,000
Total		16,000		135,500

Requirement: Ending inventory of the company is 12,500 units. Find the Costs of goods sold for the company through FIFO, LIFO and Average method.

Answer 1

Cost of goods sold:
FIFO	=	26,500
LIFO	=	37,000
Average cost	=	31,938
Workings:
FIFO	Cost of goods available for sale	Cost of goods sold	Ending Inventory
Beginning Inventory	1,500	7.00	10,500.00	1,500	7.00	10,500.00	-	7.00	-
Purchases:
Mar-05	3,000	8.00	24,000.00	2,000	8.00	16,000.00	1,000	8.00	8,000.00
Mar-13	5,500	9.00	49,500.00	-	9.00	-	5,500	9.00	49,500.00
Mar-21	4,000	10.00	40,000.00	-	10.00	-	4,000	10.00	40,000.00
Mar-26	2,000	11.00	22,000.00	-	11.00	-	2,000	11.00	22,000.00
	16,000		1,46,000.00	3,500		26,500.00	12,500		1,19,500.00
LIFO	Cost of goods available for sale	Cost of goods sold	Ending Inventory
Beginning Inventory	1,500	7.00	10,500.00	-	7.00	-	1,500	7.00	10,500.00
Purchases:
Mar-05	3,000	8.00	24,000.00	-	8.00	-	3,000	8.00	24,000.00
Mar-13	5,500	9.00	49,500.00	-	9.00	-	5,500	9.00	49,500.00
Mar-21	4,000	10.00	40,000.00	1,500	10.00	15,000.00	2,500	10.00	25,000.00
Mar-26	2,000	11.00	22,000.00	2,000	11.00	22,000.00	-	11.00	-
	16,000		1,46,000.00	3,500		37,000.00	12,500		1,09,000.00
Average cost	Cost of goods available for sale	Cost of goods sold	Ending Inventory
Beginning Inventory	1,500	7.00	10,500.00
Purchases:
Mar-05	3,000	8.00	24,000.00
Mar-13	5,500	9.00	49,500.00
Mar-21	4,000	10.00	40,000.00
Mar-26	2,000	11.00	22,000.00
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