Question

Periodic inventory by three methods; cost of goods sold

The units of an item available for sale during the year were as follows:

Jan. 1	Inventory	50 units at $104
Mar. 10	Purchase	60 units at $112
Aug. 30	Purchase	20 units at $120
Dec. 12	Purchase	70 units at $124

There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the ending inventory cost and the cost of goods sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.

inventory method	ending inventory	costs of goods sold
FIFO
LIFO
Weighted Average cost

Answer 1

	Units	Rate	Total
Inventory	50	$ 104	$   5,200
Purchase	60	$ 112	$   6,720
Purchase	20	$ 120	$   2,400
Purchase	70	$ 124	$   8,680
Available for Sale	200		$ 23,000
Sold (200-80)			120 Units
Weighted Average Rate (23000/200)			$      115

inventory method	ending inventory	costs of goods sold
FIFO	$             9,880	$                13,120
LIFO	$             8,560	$                14,440
Weighted Average cost	$             9,200	$                13,800

inventory method	ending inventory	costs of goods sold
FIFO	=70*124+10*120	=23000-9880
LIFO	=5200+30*112	=23000-8560
Weighted Average cost	=80*115	=120*115