Question

In: Accounting

The following are the transactions for the month of July. Units Unit Cost Unit Selling Price...

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.)

Solutions

Expert Solution

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

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