Question
In: Accounting
Carlson Auto Dealers Inc. sells a handmade automobile as its only product. Each automobile is identical;...
Carlson Auto Dealers Inc. sells a handmade automobile as its
only product. Each automobile is identical; however, they can be
distinguished by their unique ID number. At the beginning of 2018,
Carlson had three cars in inventory, as follows:
| Car ID | Cost | ||
| 203 | $ | 51,000 | |
| 207 | 51,000 | ||
| 210 | 54,000 | ||
During 2018, each of the three autos sold for $81,000. Additional
purchases (listed in chronological order) and sales for the year
were as follows:
| Car ID | Cost | Selling Price | ||||
| 211 | $ | 51,000 | $ | 81,000 | ||
| 212 | 51,000 | 84,000 | ||||
| 213 | 52,500 | not sold | ||||
| 214 | 54,000 | 87,000 | ||||
| 215 | 57,000 | 91,500 | ||||
| 216 | 58,500 | not sold | ||||
| 217 | 60,000 | 96,000 | ||||
| 218 | 60,300 | 97,500 | ||||
| 219 | 63,000 | not sold | ||||
Required:
1. Calculate 2018 ending inventory and cost of
goods sold assuming the company uses the specific identification
inventory method.
2. Calculate ending inventory and cost of goods
sold assuming FIFO and a periodic inventory system.
3. Calculate ending inventory and cost of goods
sold assuming LIFO and a periodic inventory system.
4. Calculate ending inventory and cost of goods
sold assuming the average cost method and a periodic inventory
system.
Solutions
Expert Solution
Solution 1:
| Specific identification (Periodic) | |||
| Particulars | Units | Cost per unit | Total |
| Beginning Inventory - CarID: | |||
| 203 | 1 | $51,000.00 | $51,000.00 |
| 207 | 1 | $51,000.00 | $51,000.00 |
| 210 | 1 | $54,000.00 | $54,000.00 |
| Purchases - Car ID: | |||
| 211 | 1 | $51,000.00 | $51,000.00 |
| 212 | 1 | $51,000.00 | $51,000.00 |
| 213 | 1 | $52,500.00 | $52,500.00 |
| 214 | 1 | $54,000.00 | $54,000.00 |
| 215 | 1 | $57,000.00 | $57,000.00 |
| 216 | 1 | $58,500.00 | $58,500.00 |
| 217 | 1 | $60,000.00 | $60,000.00 |
| 218 | 1 | $60,300.00 | $60,300.00 |
| 219 | 1 | $63,000.00 | $63,000.00 |
| Goods available for Sale | 12 | $663,300.00 | |
| Cost of goods sold - Car ID: | |||
| 203 | 1 | $51,000.00 | $51,000.00 |
| 207 | 1 | $51,000.00 | $51,000.00 |
| 210 | 1 | $54,000.00 | $54,000.00 |
| 211 | 1 | $51,000.00 | $51,000.00 |
| 212 | 1 | $51,000.00 | $51,000.00 |
| 214 | 1 | $54,000.00 | $54,000.00 |
| 215 | 1 | $57,000.00 | $57,000.00 |
| 217 | 1 | $60,000.00 | $60,000.00 |
| 218 | 1 | $60,300.00 | $60,300.00 |
| Total cost of goods sold | 9 | $489,300.00 | |
| Ending Inventory | 3 | $174,000.00 | |
Solution 2:
| FIFO (Periodic) | |||
| Particulars | Units | Cost per unit | Total |
| Beginning Inventory - CarID: | |||
| 203 | 1 | $51,000.00 | $51,000.00 |
| 207 | 1 | $51,000.00 | $51,000.00 |
| 210 | 1 | $54,000.00 | $54,000.00 |
| Purchases - Car ID: | |||
| 211 | 1 | $51,000.00 | $51,000.00 |
| 212 | 1 | $51,000.00 | $51,000.00 |
| 213 | 1 | $52,500.00 | $52,500.00 |
| 214 | 1 | $54,000.00 | $54,000.00 |
| 215 | 1 | $57,000.00 | $57,000.00 |
| 216 | 1 | $58,500.00 | $58,500.00 |
| 217 | 1 | $60,000.00 | $60,000.00 |
| 218 | 1 | $60,300.00 | $60,300.00 |
| 219 | 1 | $63,000.00 | $63,000.00 |
| Goods available for Sale | 12 | $663,300.00 | |
| Cost of goods sold - Car ID: | |||
| 203 | 1 | $51,000.00 | $51,000.00 |
| 207 | 1 | $51,000.00 | $51,000.00 |
| 210 | 1 | $54,000.00 | $54,000.00 |
| 211 | 1 | $51,000.00 | $51,000.00 |
| 212 | 1 | $51,000.00 | $51,000.00 |
| 213 | 1 | $52,500.00 | $52,500.00 |
| 214 | 1 | $54,000.00 | $54,000.00 |
| 215 | 1 | $57,000.00 | $57,000.00 |
| 216 | 1 | $58,500.00 | $58,500.00 |
| Total cost of goods sold | 9 | $480,000.00 | |
| Ending Inventory | 3 | $183,300.00 | |
Solution 3:
| LIFO (Periodic) | |||
| Particulars | Units | Cost per unit | Total |
| Beginning Inventory - CarID: | |||
| 203 | 1 | $51,000.00 | $51,000.00 |
| 207 | 1 | $51,000.00 | $51,000.00 |
| 210 | 1 | $54,000.00 | $54,000.00 |
| Purchases - Car ID: | |||
| 211 | 1 | $51,000.00 | $51,000.00 |
| 212 | 1 | $51,000.00 | $51,000.00 |
| 213 | 1 | $52,500.00 | $52,500.00 |
| 214 | 1 | $54,000.00 | $54,000.00 |
| 215 | 1 | $57,000.00 | $57,000.00 |
| 216 | 1 | $58,500.00 | $58,500.00 |
| 217 | 1 | $60,000.00 | $60,000.00 |
| 218 | 1 | $60,300.00 | $60,300.00 |
| 219 | 1 | $63,000.00 | $63,000.00 |
| Goods available for Sale | 12 | $663,300.00 | |
| Cost of goods sold - Car ID: | |||
| 211 | 1 | $51,000.00 | $51,000.00 |
| 212 | 1 | $51,000.00 | $51,000.00 |
| 213 | 1 | $52,500.00 | $52,500.00 |
| 214 | 1 | $54,000.00 | $54,000.00 |
| 215 | 1 | $57,000.00 | $57,000.00 |
| 216 | 1 | $58,500.00 | $58,500.00 |
| 217 | 1 | $60,000.00 | $60,000.00 |
| 218 | 1 | $60,300.00 | $60,300.00 |
| 219 | 1 | $63,000.00 | $63,000.00 |
| Total cost of goods sold | 9 | $507,300.00 | |
| Ending Inventory | 3 | $156,000.00 | |
Solution 4:
| Weighted Average (Periodic) | |||
| Particulars | Units | Cost per unit | Total |
| Beginning Inventory - CarID: | |||
| 203 | 1 | $51,000.00 | $51,000.00 |
| 207 | 1 | $51,000.00 | $51,000.00 |
| 210 | 1 | $54,000.00 | $54,000.00 |
| Purchases - Car ID: | |||
| 211 | 1 | $51,000.00 | $51,000.00 |
| 212 | 1 | $51,000.00 | $51,000.00 |
| 213 | 1 | $52,500.00 | $52,500.00 |
| 214 | 1 | $54,000.00 | $54,000.00 |
| 215 | 1 | $57,000.00 | $57,000.00 |
| 216 | 1 | $58,500.00 | $58,500.00 |
| 217 | 1 | $60,000.00 | $60,000.00 |
| 218 | 1 | $60,300.00 | $60,300.00 |
| 219 | 1 | $63,000.00 | $63,000.00 |
| Goods available for Sale | 12 | $55,275.00 | $663,300.00 |
| Cost of goods sold | 9 | $55,275.00 | $497,475.00 |
| Ending Inventory | 3 | $165,825.00 | |
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