Question

In: Accounting

    Use the following information for this question:                    June 1          &

    Use the following information for this question:

                   June 1                 Inventory 100 @ $1.00

                            6                 Purchased 150 @ $1.10

                          13                 Purchased   50 @ $1.20

                          20                 Purchased 100 @ $1.30

                          25                 Purchased   25 @ $1.40                                                              

                           Total Units Sold in June: 300 units

Using the last-in, first-out (LIFO) method, the COST OF GOODS SOLD is

A)$362.50 B)$127.50
C)$325 D)$165

Using the first-in, first-out (FIFO) method, the cost assigned to the ENDING INVENTORY (not Cost of Goods Sold) would be

A)$325 B)$362.50
C)$227.50 D)$165

Using the average weighted-average cost method and (if necessary) rounding to the nearest dollar, the cost assigned to the ENDING INVENTORY (not Cost of Goods Sold) would be

A)$216 B)$144
C)$360 D)$346

Solutions

Expert Solution

1 Correct option is: A) $362.50
2 Correct option is: D) $165
3 Correct option is: B) $144
Workings:
LIFO Cost of goods available for sale Cost of goods sold Ending Inventory
Beginning Inventory                  100 $                 1.00 $                100               -   $            1.00 $                   -           100 $        1.00 $             100
Purchases:
Jun-06                  150 $                 1.10 $                165            125 $            1.10 $          137.50           25 $        1.10 $               28
Jun-13                    50 $                 1.20 $                   60              50 $            1.20 $            60.00            -   $        1.20 $                -  
Jun-20                  100 $                 1.30 $                130            100 $            1.30 $          130.00            -   $        1.30 $                -  
Jun-25                    25 $                 1.40 $                   35              25 $            1.40 $            35.00 $        1.40
                 425 $                490            300 $          362.50         125 $             128
FIFO Cost of goods available for sale Cost of goods sold Ending Inventory
Beginning Inventory                  100 $                 1.00 $                100            100 $            1.00 $          100.00            -   $        1.00 $                -  
Purchases:
Jun-06                  150 $                 1.10 $                165            150 $            1.10 $          165.00            -   $        1.10 $                -  
Jun-13                    50 $                 1.20 $                   60              50 $            1.20 $            60.00            -   $        1.20 $                -  
Jun-20                  100 $                 1.30 $                130 $            1.30 $                   -           100 $        1.30 $       130.00
Jun-25                    25 $                 1.40 $                   35 $            1.40 $                   -             25 $        1.40 $         35.00
                 425 $                490            300 $          325.00         125 $       165.00
Weighted Average Cost of goods available for sale Cost of goods sold Ending Inventory
Beginning Inventory                  100 $                 1.00 $                100
Purchases:
Jun-06                  150 $                 1.10 $                165
Jun-13                    50 $                 1.20 $                   60

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