Question

Beginning inventory, purchases, and sales data for May for Ewert, Inc. are as follows:

May 1 Inventory 25 units at $10

       4   Purchase 20 units at $12

12 Purchase 15 units at $15

Assume 30 units were sold during the month for a price of $25 per unit.

Required:

Part 1) Determine the COST OF GOODS SOLD under each of the following methods:

First-in first-out (FIFO)

Weighted-average

Last-in first-out (LIFO)

Part 2) Determine the ENDING INVENTORY under each of the following methods:

A) First-in first-out (FIFO)

Answer 1

Solution

Requirement 1

	FIFO	LIFO	Weighted Average
Cost of Goods Sold	$       310.00	$    405.00	$ 357.50

Requirement 2

	FIFO	LIFO	Weighted Average
Ending Inventory	$       405.00	$    310.00	$ 357.50

Working

	Units	Cost per unit	value
Beginning Balance	25	$            10.00	$           250.00
Purchases
04-May	20	$            12.00	$           240.00
12-May	15	$            15.00	$           225.00
	60		$        715.000

Average Cost of Inventory
Units	(A)	60
Total Cost	(B)	$    715.00
Average Cost	(C=B/A)	$       11.92

FIFO
Total Units Available for sale		60
Units Sold		30
Closing Stock in Units		30
Valuation
Ending Inventory	15	@	$   12.00	$    180.00
	15	@	$   15.00	$    225.00
Value Of Ending Inventory				$    405.00
Cost of Goods sold	(715-405)			$    310.00

LIFO
Total Units Available for sale		60
Units Sold		30
Closing Stock in Units		30
Valuation
Ending Inventory	25	@	$   10.00	$    250.00
	5	@	$   12.00	$       60.00
Value Of Ending Inventory				$    310.00
Cost of Goods sold	(715-310)			$    405.00

Weighted Average method
Total Units Available for sale		60
Units Sold		30
Closing Stock in Units		30
Valuation
Ending Inventory	30	@	$   11.92	$    357.50
Value Of Ending Inventory				$    357.50
Cost of Goods sold	(Total Purchase and opening stock Minus Closing Stock)			$    357.50