Question
In: Accounting
Calculate the Ending inventory from the following information using FIFO, WEIGHTED AVERAGE methods of Material issues:...
- Calculate the Ending inventory from the following information using FIFO, WEIGHTED AVERAGE methods of Material issues:
The details relating to the purchase and sales of Material X is given below. Calculate the Ending inventory and Cost of goods sold for the Material X:
|
Date |
PARTICULARS |
OMR |
|
1.1.2014 |
Opening stock of Material X 250 units at |
1.200 |
|
5.1.2014 |
Purchased 350 units of Material X at |
1.275 |
|
7.12014 |
Purchased 425 units of Material X at |
1.340 |
|
10.1.2014 |
Sold 800 units |
|
|
12.1.2014 |
Purchased 550 units of Material X at |
1.425 |
|
15.1.2014 |
Sold 620 units |
1.500 |
|
20.1.2014 |
Sold 120 units |
Solutions
Expert Solution
| Date | Particulars | Unit | Price | Amount | |||||
| 1.1.2014 | Opening Stock | 250 | 1.200 | 300.00 | |||||
| 5.1.2014 | Purchased | 350 | 1.275 | 446.25 | |||||
| 7.1.2014 | Purchased | 425 | 1.340 | 569.50 | |||||
| 10.1.2014 | Sold | 800 | |||||||
| 12.1.2014 | Purchased | 550 | 1.425 | 783.75 | |||||
| 15.1.2014 | Sold | 620 | |||||||
| 20.1.2014 | Sold | 120 | |||||||
| Closing Inventory | 35 | ||||||||
| FIFO Method | |||||||||
| Note: Closing inventory is 35 units (250+350+425-800+550-620-120) | |||||||||
| the same is clearly remaining from the units purchased on 12.1.2014 | |||||||||
| therefore the rate is used 1.425 for valuing ending inventory from FIFO method | |||||||||
| and the value from FIFO method is 49.88 | |||||||||
| COGS from FIFO is 2049.63 (Total purchase less ending inventory value i.e. 2099.50 less 49.88) | |||||||||
| WAC Method | |||||||||
| WAC of the material is = (Opening inventory value + Purchase Value)/ (Opening unit + Purchase Unit) | |||||||||
| = | (300+446.25+569.50+783.75)/(250+350+425+550) | ||||||||
| = | 1.333 | ||||||||
| therefore Closing inventory from WAC method is 46.66 (1.333*35) | |||||||||
| COGS from WAC is 2052.84 (Total purchase less ending inventory value i.e. 2099.50 less 46.66) |
ekkarill92 answered 1 year agoRelated Solutions
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Balance
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Units
Cost
Total
Units
Cost
Total
Units
Cost
Total
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Total Cost
WA Cost Per unit
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26
$11
$286
26
$11
$286
Apr-15
52
$13
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$
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Apr-20
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March 3 - Purchase 300 units for $15
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Purchase
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9
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Purchase
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Nov. 23
Purchase
14
units at $33
462
29
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