Question

The following are the transactions for the month of July.

Units Unit Cost Unit
Selling Price
  July 1 Beginning Inventory 59 $ 10
  July 13 Purchase 295 13
  July 25 Sold ( 100 ) $ 15
  

  July 31 Ending Inventory 254

Calculate cost of goods available for sale and ending inventory, then sales, cost of goods sold, and gross profit, under (a) FIFO, (b) LIFO, and (c) weighted average cost. Assume a periodic inventory system is used. (Round "Cost per Unit" to 2 decimal places and your final answers to nearest whole dollar amount.)

Answer 1

Beginning inventory (59 x $10)	590
Purchases (295 x $13)	3835
Cost of goods available for sale $	4425

	FIFO	LIFO	Weighted Average
Sales (100 x $15)	1500	1500	1500
Cost of goods sold	1123	1300	1250
Gross profit	377	200	250
Ending inventory balance	3302	3125	3175

Working:

FIFO:

Ending inventory = (254 x $13) = $3302

Cost of goods sold = $4425 - $3302 = $1123

LIFO:

Ending inventory = (59 x $10) + (195 x $13) = $590 + $2535 = $3125

Cost of goods sold = $4425 - $3125 = $1300

Weighted Average:

Weighted Average rate = $4425/354 = $12.50

Ending inventory = 254 x $12.50 = $3175

Cost of goods sold = 100 x $12.50 = $1250