Question

PLEASE SHOW ME THE CALCULATION

SheldonSheldon

​Company's inventory records for the most recent year contain the following​ data:

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​(Click the icon to view the​ data

THE DATA IS POSTED BELOW

SheldonSheldon

Company sold a total of

21 comma 10021,100

units during the year.Read the requirements

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.

Requirement 1. Using the​ average-cost method, compute the cost of goods sold and ending inventory for the year. ​(Round the average cost per unit to the nearest​cent.)

Using the average-cost method, the cost of goods sold is

$

and the ending inventory is

$

.

Requirement 2. Using the FIFO​ method, compute the cost of goods sold and ending inventory for the year.

Using the FIFO method, the cost of goods sold is

$

and the ending inventory is

$

.

Quantity  Unit Cost

Beginning inventory-  9,000 $18.00

Purchases during year - 16,000  $20.00

Answer 1

• All working forms part of the answer
• Requirement 1

--Working

Beginning Inventory cost = 9000 x 18 = $ 162,000
Purchase cost = 16000 x $ 20 = $ 320,000

Total cost of Goods available for sale = 320000 + 162000 $ 482,000
Total units available = 9000 + 16000 = 25,000 units

Average cost = 482000 / 25000 = $ 19.28 per unit

--Answer

Using the average-cost method, the cost of goods sold is

$ 406,808

[21,100 units x $ 19.28]

and the ending inventory is

$ 75,192

[ (9000 + 16000 – 21100) units x $ 19.28]

• Requirement 2

Cost of goods sold:			Ending inventory is
From Beginning balance	$ 162,000	[9000 x $ 18]	From Beginning balance	$ 0	[0 units x $ 18]
From Purchases	$ 242,000	[12100 x 20]	From Purchases	$ 78,000	[3900 x 20]
Using the FIFO method, the cost of goods sold is	$ 404,000		and the ending inventory is	$ 78,000