Question

Kingbird Company’s record of transactions for the month of April was as follows.

Purchases							Sales
April 1	(balance on hand)		1,500	@	$6.00		April 3		1,250	@	$10.00
4			3,750	@	6.08		9		3,500	@	10.00
8			2,000	@	6.40		11		1,500	@	11.00
13			3,000	@	6.50		23		3,000	@	11.00
21			1,750	@	6.60		27		2,250	@	12.00
29			1,250	@	6.79				11,500
			13,250

A.

Assuming that periodic inventory records are kept in units only, calculate the average-cost per unit. (Round answer to 2 decimal places, e.g. 2.76.)

Average-cost per unit $

Ab. Assuming that periodic inventory records are kept in units only, compute the inventory at April 30 using LIFO and average-cost. (Round answer to 0 decimal places, e.g. 2,760.)

LIFO		$
Average-cost		$

B. Assuming that perpetual inventory records are kept in dollars, determine the inventory using (1) FIFO and (2) LIFO. (Round answer to 0 decimal places, e.g. 2,760.)

		(1) FIFO		(2) LIFO
Inventory		$		$

C. Compute cost of goods sold assuming periodic inventory procedures and inventory priced at FIFO. (Round answer to 0 decimal places, e.g. 2,760.)

Cost of goods sold $

Answer 1

Solution

A ) a) Assuming that periodic inventory records are kept in units only, calculate the average-cost per unit

Working Average Cost
Date	Purchase	Cost of Goods Sold	Inventory on Hand
Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Apr.1							1500	$6.00	$9,000
Apr.3				1250	$6.00	$7,500	250	$6.00	$1,500
Apr.4	3750	$6.08	$22,800				4000	$6.08	$24,300	($1500 + $22800)/4000
Apr.8	2000	$6.40	$12,800				6000	$6.18	$37,100	($24300 + $12800)/6000
Apr.9				3500	$6.18	$21,642	2500	$6.18	$15,458
Apr.11				1500	$6.18	$9,275	1000	$6.18	$6,183
Apr.13	3000	$6.50	$19,500				4000	$6.42	$25,683	($6183 + $19500)/4000
Apr.21	1750	$6.60	$11,550				5750	$6.48	$37,233	($25683 + $11550)/5750
Apr.23				3000	$6.48	$19,426	2750	$6.48	$17,807
Apr.27				2250	$6.48	$14,570	500	$6.48	$3,238
Apr.29	1250	$6.79	$8,488				1750	$6.70	$11,725	($3238 + $8488)/1750
Totals	11750		$75,138	11500		$72,412	1750		$11,725

Average Cost per Unit = $6.70 per unit ($11,725/1750)

b) Assuming that periodic inventory records are kept in units only, compute the inventory at April 30 using LIFO and average-cost

Inventory at April 30
LIFO	$10,520.00	=1500 * $6.00 + (250 * $6.08 )
Average-cost	$11,725.18	=1750 * $6.70

B)  Assuming that perpetual inventory records are kept in dollars, determine the inventory using (1) FIFO and (2) LIFO

Ending Inventory using FIFO & LIFO
FIFO	Units	Rate	Value
Inventory from April 29	1250	$6.79	$8,487.50
Inventory from April 21	500	$6.60	$3,300.00
Total			$11,787.50
LIFO	Units	Rate	Value
Beginning Inventory	1500	$6.00	$9,000.00
Inventory from April 4	250	$6.08	$1,520.00
Total			$10,520.00

C) Compute cost of goods sold assuming periodic inventory procedures and inventory priced at FIFO.

4. Cost of Goods Sold

$72,350

(See Working in Table)

Date	Purchase			Cost of Goods Sold			Inventory on Hand
	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost	Quantity	Unit Cost	Total Cost
Apr.1							1500	$6.00	$9,000
Apr.3				1250	$6.00	$7,500	250	$6.00	$1,500
Apr.4	3750	$6.08	$22,800				250	$6.00	$1,500
							3750	$6.08	$22,800
Apr.8	2000	$6.40	$12,800				250	$6.00	$1,500
							3750	$6.08	$22,800
							2000	$6.40	$12,800
Apr.9				250	$6.00	$1,500	0	$6.00	$0
				3250	$6.08	$19,760	500	$6.08	$3,040
							2000	$6.40	$12,800
Apr.11				500	$6.08	$3,040	0	$6.08
				1000	$6.40	$6,400	1000	$6.40	$6,400
Apr.13	3000	$6.50	$19,500				1000	$6.40	$6,400
							3000	$6.50	$19,500
Apr.21	1750	$6.60	$11,550				1000	$6.40	$6,400
							3000	$6.50	$19,500
							1750	$6.60	$11,550
Apr.23				1000	$6.40	$6,400	0	$6.40	$0
				2000	$6.50	$13,000	1000	$6.50	$6,500
							1750	$6.60	$11,550
Apr.27				1000	$6.50	$6,500	0	$6.50	$0
				1250	$6.60	$8,250	500	$6.60	$3,300
Apr.29	1250	$6.79	$8,488				500	$6.60	$3,300
							1250	$6.79	$8,488
Totals	11750		$75,138	11500		$72,350	1750		$11,788

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