Question

Oahu Kiki tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each month, as if it uses a periodic inventory system. Assume Oahu Kiki’s records show the following for the month of January. Sales totaled 280 units.

	Date	Units			Unit Cost			Total Cost
Beginning Inventory	January 1		120		$	85		$	10,200
Purchase	January 15		380			95			36,100
Purchase	January 24		200			115			23,000

Required:

1.	Calculate the number and cost of goods available for sale.

2.	Calculate the number of units in ending inventory.

3.	Calculate the cost of ending inventory and cost of goods sold using the (a) FIFO, (b) LIFO, and (c) weighted average cost methods.

Answer 1

ans 1	Calculate the number and cost of goods available for sale.
		Date	Unit	Unit cost	Total Cost
	Beginning Inventory	January 1	120	85	10,200
	Purchase	January 15	380	95	36,100
	Purchase	January 24	200	115	23,000
					69,300
	Therefore cost of goods available for sale =				69,300
Ans 2	Calculate the number of units in ending inventory.
		Date	Unit
	Beginning Inventory	January 1	120
	Purchase	January 15	380
	Purchase	January 24	200
	Total unit		700
	sales		280
	Ending inventory		420
Ans 3	alculate the cost of ending inventory and cost of goods sold
	a) FIFO
	Ending inventory	200*115+220*95		43900
	COGS = 69300-43900			25,400
	B) LIFO
	Ending inventory	120*85+200*95		29200
	COGS = 69300-29200			40,100
	C) Weighted average cost
		Date	Unit	Unit cost	Total Cost
	Beginning Inventory	January 1	120	85	10,200
	Purchase	January 15	380	95	36,100
	Purchase	January 24	200	115	23,000
			700		69,300
	Average cost = 69300/700				99.00
	Ending inventory	99*420			41,580.00
	COGS = 99*280				27,720.00