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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