Question

Inventory Costing Methods—Periodic Method

The following data are for the Porter Corporation, which sells just one product:

		Units	Unit Cost
Beginning Inventory, January 1		1,200	$8
Purchases:	February 11	1,500	9
	May 18	1,400	12
	October 23	1,100	14
Sales:	March 1	1,400
	July 1	1,400
	October 29	1,200

Calculate the value of ending inventory and cost of goods sold at year-end using the periodic method and (a) first-in, first-out, (b) last-in, first-out, and (c) weighted-average cost method. Round the cost per unit to 3 decimal places and round your final answers to the nearest dollar.

a.	First-in, First-out:
	Ending Inventory	Answer
	Cost of goods sold	Answer
b.	Last-in, first-out:
	Ending Inventory	Answer
	Cost of goods sold	Answer
c.	Weighted Average
	Ending Inventory	Answer
	Cost of goods sold	Answer

Answer 1

	Units	Unit cost	Total
Beginning Inventory	1200	8	9600
February 11	1500	9	13500
May 18	1400	12	16800
October 23	1100	14	15400
Total	5200		55300
Sales units	4000	=1400+1400+1200
Ending inventory units	1200	=5200-4000
Average cost	10.635	=55300/5200
a
First-in, First-out:
Ending Inventory	16600	=(1100*14)+(1200-1100)*12
Cost of goods sold	38700	=55300-16600
b
Last-in, first-out:
Ending Inventory	9600	=1200*8
Cost of goods sold	45700	=55300-9600
c
Weighted Average :
Ending Inventory	12762	=1200*10.635
Cost of goods sold	42538 or 42540	=55300-12762