Question

Shown below is the activity for one of the products of California Office Equipment

January 1 balance, 550 units @ $60 per unit Purchases:

January 10: 450 units @ $65 per unit

January 20: 1,100 units @ $57 per units

Sales: January 12: 950 units

January 28: 800 units

Required: Compute the January 31 ending inventory and cost of goods sold for January assuming California uses:

1. Periodic average cost

2. Periodic LIFO

3. Perpetual FIFO

4. Perpetual LIFO

(Do not round intermediate calculations. Round your final answers to nearest whole dollar amount)

Answer 1

>> Cost of Goods available for sale = ( 550 * $ 60 ) + ( 450 * $ 65 ) + ( 1100 * $ 57 )

>> Cost of Goods available for sale = $ 124,950.

>> Goods available for sale = 550 + 450 + 1100

>> Goods available for sale = 2100

>> Ending inventory units = 2100 - 950 - 800

>> Ending inventory units = 350.

Question -1

:: Periodic Average cost

>> Average cost per unit = $ 124,950 / 2100

>> Average cost per unit = $ 59.5.

>> Ending Inventory = 350 * $ 59.5

>> Ending Inventory = $ 20,825

>> Cost of Goods sold = $ 124,950 - $ 20,825

>> Cost of Goods sold = $ 104,125.

Question -2

:: Periodic LIFO

>> Ending Inventory = 350 * $ 60

>> Ending Inventory = $ 21,000.

>> Cost of Goods sold = $ 124,950 - $ 21,000

>> Cost of Goods sold = $ 103,950.

Question -3

:: Perpetual FIFO

>> Ending Inventory = 350 * $ 57

>> Ending Inventory = $ 19,950

>> Cost of Goods sold = $ 124,950 - $ 19,950

>> Cost of Goods sold = $ 105,000.

Question -4

:: Perpetual LIFO

>> Ending Inventory = ( 300 * $ 57 ) + ( 50 * $ 60 )

>> Ending Inventory = $ 20,100

>> Cost of Goods sold = $ 124,950 - $ 20,100

>> Cost of Goods sold = $ 104,850.