Question

In: Accounting

Assume Joker Company uses a periodic inventory system. Calculate cost of goods sold and ending inventory using (1) FIFO, (2) LIFO and (3) average cost. Round per unit cost to two decimal places.

Date

Transaction

Quantity

Price/Cost

1/1

Beginning inventory

2,000

10.00

1/3

Purchases

18,000

10.40

1/7

Sales (@ $26 per unit)

7,000

  

1/20

Purchases

6,000

11.00

1/22

Sales (@ $27 per unit)

16,000

  

1/30

Purchases

3,000

12.00

 

  1. Assume Joker Company uses a periodic inventory system. Calculate cost of goods sold and ending inventory using (1) FIFO, (2) LIFO and (3) average cost. Round per unit cost to two decimal places.

 

  1. Assume Joker Company uses a perpetual inventory system. Calculate cost of goods sold and ending inventory using (1) FIFO, (2) LIFO and (3) average cost. Round per unit cost to two decimal places.

Solutions

Expert Solution

Correct Anwer:

Requirement 1 : Periodic Inventory System

Cost of Goods Available for sale

Units

Cost per unit

value

Beginning Inventory

2000

$          10.00

$     20,000.00

Purchases

18000

10.4

$ 1,87,200.00

10-Jan

6000

$          11.00

$     66,000.00

20-Jan

3000

$          12.00

$     36,000.00

total

29000

$ 3,09,200.00

FIFO (Periodic)

Total Units Avalable for sale

29000

$            3,09,200.00

Units Sold

23000

Ending Inventory Units

6000

Valuation

Cost of Goods Sold

$                               -  

2000

$             10.00

$                20,000.00

5000

$             10.40

$                52,000.00

13000

10.4

$            1,35,200.00

3000

11

$                33,000.00

total cost of goods sold

$            2,40,200.00

Ending Inventory

(309,200 – 240,200)

$                      69,000

LIFO (Periodic)

Total Units Available for sale

29000

$            3,09,200.00

Units Sold

23000

Ending Inventory Units

6000

Valuation

Ending Inventory

3000

$             12.00

$                36,000.00

4000

$             11.00

$                44,000.00

2000

$             11.00

$                22,000.00

14000

$             10.40

$               1,45,600.0

Value Of Ending Inventory

$                  2,47,600

Cost of Goods sold

(309,200 -247,600)

$                61,600.00

Weighted Average Cost

Units

(A)

29000

Total Cost

(B)

$    3,09,200

Average Cost

(C=B/A)

$          10.66

Weighted Average

Total Units Available for sale

29000

$            3,09,200.00

Units Sold

23000

Ending Inventory Units

6000

Valuation

Cost of Goods sold

23000

@

$             10.66

$            2,45,227.59

Total cost of Goods Sold

$            2,45,227.59

Ending Inventory

(309,200 – 245,277.59)

$                63,972.41

Requirement 2: Perpetual Inventory .

Cost of Goods Available for sale

Units

Cost per unit

value

Beginning Inventory

2000

$          10.00

$     20,000.00

Purchases

18000

10.4

$ 1,87,200.00

10-Jan

6000

$          11.00

$     66,000.00

20-Jan

3000

$          12.00

$     36,000.00

total

29000

$ 3,09,200.00

FIFO (Perpetual)

Total Units Available for sale

29000

$            3,09,200.00

Units Sold

23000

Ending Inventory Units

6000

Valuation

Cost of Goods Sold

$                               -  

2000

$             10.00

$                20,000.00

5000

$             10.40

$                52,000.00

13000

10.4

$            1,35,200.00

3000

11

$                33,000.00

total cost of goods sold

$            2,40,200.00

Ending Inventory

($ 309,200 – 240,200)

$                      69,000

LIFO (Perpetual)

Total Units Available for sale

29000

$            3,09,200.00

Units Sold

23000

Ending Inventory Units

6000

Valuation

Cost of Goods sold

7000

$             10.40

$                72,800.00

6000

$             11.00

$                66,000.00

10000

$             10.40

$            1,04,000.00

Cost of Goods Sold

$                  2,42,800

Value of Ending Inventory

($309,200 – 242,800)

$                66,400.00

Average cost per unit as on (1/7)

units

cost

total

beginning balance

2000

$                10.00

$        20,000.00

purchases (1/3)

18000

$                10.40

$    1,87,200.00

total

20000

$    2,07,200.00

average cost per unit

$                10.36

Average cost per unit as on (1/22)

units

cost

total

beginning balance

13000

$                10.36

$    1,34,680.00

purchases (1/3)

6000

$                11.00

$        66,000.00

total

19000

$    2,00,680.00

average cost per unit

$                10.56

Weighted Average (perpetual Inventory)

Total Units Avalable for sale

29000

$            3,09,200.00

Units Sold

23000

Ending Inventory Units

6000

Valuation

Cost of Goods sold

7000

@

$             10.36

$                72,520.00

16000

@

$             10.56

$            1,68,993.68

Total cost of Goods Sold

$            2,41,513.68

Ending Inventory

($ 309,200 – $ 241,513.68)

$                67,686.32

End of Answer:

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ekkarill92 answered 3 years ago
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