In: Accounting
The beginning inventory and purchases of Commodity A for the period were as follows:
Beginning inventory 24 units @ $10 each
First purchase 32 units @ $11 each
Second purchase 20 units @ $13 each
Third purchase 20 units @ $15 each
The company uses the periodic system and there were 25 units of Commodity A in the inventory at the end of the period.
REQUIRED: Determine the cost of the 25 units in the inventory by each of the following methods: Show all supporting calculations or no credit.
(C) $_____________Weigthted Average
Solution
FIFO | LIFO | Weighted Average | |
Ending Inventory | $ 365 | $ 251 | $ 300 |
Working
Units | Cost per unit | value | |
Beginning Balance | 24 | $ 10.00 | $ 240 |
Purchases | |||
32 | $ 11.00 | $ 352 | |
20 | $ 13.00 | $ 260 | |
20 | $ 15.00 | $ 300 | |
Cost of goods available for sale | 96 | $ 1,152 |
.
Average Cost of Inventory | ||
Units | (A) | 96 |
Total Cost | (B) | $ 1,152 |
Average Cost | (C=B/A) | $ 12.000 |
.
FIFO | ||||
Total Units Available for sale | 96 | |||
Units Sold | 71 | |||
Closing Stock in Units | 25 | |||
Valuation | ||||
Ending Inventory | 20 | @ | $ 15.00 | $ 300 |
5 | @ | $ 13.00 | $ 65 | |
Value Of Ending Inventory | $ 365 |
.
LIFO | ||||
Total Units Available for sale | 96 | |||
Units Sold | 71 | |||
Closing Stock in Units | 25 | |||
Valuation | ||||
Ending Inventory | 24 | @ | $ 10.00 | $ 240 |
1 | @ | $ 11.00 | $ 11 | |
Value Of Ending Inventory | $ 251 |
.
Weighted Average method | ||||
Total Units Available for sale | 96 | |||
Units Sold | 71 | |||
Closing Stock in Units | 25 | |||
Valuation | ||||
Ending Inventory | 25 | @ | $ 12.000 | $ 300 |