Question

Taylor Ltd. sells many products. Hoot is one of its popular items. Below is an analysis of the inventory purchases and sales of Hoot for the month of March. Owl uses the perpetual inventory system.
   Purchases                  Sales   
                                                            Units           Unit Cost          Units       Selling Price/Unit
Mar       1     Beginning inventory       600                  $40
             3      Purchase                       100                    60
             4      Sales                                                                              190                   $80
           10      Purchase                       100                    66
           16      Sales                                                                              275                   120
           19      Sales                                                                              220                   120
           25      Sales                                                                                75                   120
           30      Purchase                       460                    75

Instructions
(a)   Using the FIFO cost formula, calculate the cost of goods sold for March. Show calculations.
(b)   Using the average cost formula, calculate the ending inventory at March 31. Show calculations and use unrounded numbers in your calculations but round to the nearest cent for presentation purposes in your answer.

Answer 1