Question

Computing Cost of Sales and Ending Inventory
Stocken Company has the following financial records for the current period.

	Units	Unit Cost
Beginning Inventory	100	$ 26
Purchases: #1	650	22
#2	550	18
#3	200	16

Ending inventory is 350 units. Compute the ending inventory and the cost of goods sold for the current period using (a) first-in, first out, (b) average cost, and (c) last-in, first out.

(a) First-in, first-out
Ending inventory	$Answer
Cost of goods sold	$Answer
(b) Average cost
Ending inventory	$Answer
Cost of goods sold	$Answer
(c) Last-in, first-out
Ending inventory	$Answer
Cost of goods sold	$Answer

Answer 1

		Units	Unit Cost	Total
	Beginning Inventory	100	26.00	2600
	Purchases: #1	650	22.00	14300
	#2	550	18.00	9900
	#3	200	16.00	3200
	Total Units Available	1500		30000
	Less: Closing Inventory	350
	Units Sold	1150
A	FIFO:
	Units Sold	1150
	In FIFO Method, First In Units are sold first
	Beginning Inventory	100	26.00	2600
	Purchases: #1	650	22.00	14300
	#2-(1150-100-650)	400	18.00	7200
	Cost of Goods Sold	1150		24100
	Ending Inventory	350		5900	(30000-24100)
B	Average Cost:
	Computation of Average Cost:	A	B	B/A
	Total Units Available	1500	30000	20.00
			Average Cost
	Cost of Goods Sold	1150	20.00	23000
	Ending Inventory	350	20.00	7000
C	LIFO:
	Units Sold	1150
	In LIFO Method, Last In Units are sold first
	#3	200	16.00	3200
	#2	550	18.00	9900
	Purchases: #1-(1150-200-550)	400	22.00	8800
	Cost of Goods Sold	1150		21900
	Ending Inventory	350		8100	(30000-21900)