Question

Inventory by Three Methods; Cost of Merchandise Sold

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

Jan. 1	Inventory	50 units @ $124 per unit
Mar. 10	Purchase	40 units @ $134 per unit
Aug. 30	Purchase	10 units @ $140 per unit
Dec. 12	Purchase	100 units @ $144 per unit

There are 20 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the inventory cost and the cost of merchandise sold by three methods, presenting your answers in the form below. Round the average cost per unit to the nearest cent and round your final answers to the nearest whole dollar.

Schedule of Cost of Merchandise Inventory and Cost of Merchandise Sold Inventory Method Merchandise Inventory Merchandise Sold a. FIFO $   $   b. LIFO c. Average cost

Answer 1

STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC FIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	50	124	6200	50	124	6200
Purchasse
10-Mar	40	134	5360	40	134	5360
30-Aug	10	140	1400	10	140	1400
12-Dec	100	144	14400	80	144	11520	20	144	2880
TOTAL	200		27360	180		24480	20		2880
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC LIFO METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	50	124	6200	30	124	3720	20	124	2480
Purchasse
10-Mar	40	134	5360	40	134	5360
30-Aug	10	140	1400	10	140	1400
12-Dec	100	144	14400	100	144	14400
TOTAL	200		27360	180		24880	20		2480
STATEMENT SHOWING INVENTORY RECORD UNDER PERIODIC WEIGHTED AVERAGE METHOD
	RECIEPTS			COST OF GOODS SOLD			BALANCE
DATE	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $	UNITS	RATE	AMOUNT $
1-Jan	50	124	6200
Purchasse
10-Mar	40	134	5360
30-Aug	10	140	1400
12-Dec	100	144	14400
TOTAL	200	136.8	27360	180	136.8	24624	20	136.8	2736
			Ending inventory		COGS
FIFO			2880		24480
LIFO			2480		24880
Averagge			2736		24624