Question

Samuelson and Messenger (SAM) began 2021 with 360 units of its one product. These units were purchased near the end of 2020 for $20 each. During the month of January, 180 units were purchased on January 8 for $23 each and another 360 units were purchased on January 19 for $25 each. Sales of 170 units and 270 units were made on January 10 and January 25, respectively. There were 460 units on hand at the end of the month. SAM uses a periodic inventory system. Required: 1. Calculate ending inventory and cost of goods sold for January using FIFO. 2. Calculate ending inventory and cost of goods sold for January using average cost.

FIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Ending Inventory - Periodic FIFO # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory Beginning Inventory 360 $20.00 $7,200 20.00 $0 $20.00 $0 Purchases: January 8 180 23.00 4,140 23.00 0 23.00 0 January 19 360 25.00 9,000 25.00 0 25.00 0 Total 900 $20,340 0 $0 0 $0

Answer 1

• Requirement asked

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	360	$                20.00	$                        7,200.00	360	$               20.00	$                 7,200.00	0	$                 20.00	$                         -
Purchases:
08-Jan	180	$                23.00	$                        4,140.00	80	$               23.00	$                 1,840.00	100	$                 23.00	$            2,300.00
19-Jan	360	$                25.00	$                        9,000.00	0	$               25.00	$                              -	360	$                 25.00	$            9,000.00
TOTAL	900		$                      20,340.00	440		$                 9,040.00	460		$          11,300.00