Question
In: Accounting
Cost of Goods Sold and Ending Inventory for each of the following methods:
Calculate the following:
Cost of Goods Sold and Ending Inventory for each of the following methods:
a. FIFO
b. LIFO
c. Weighted Average
Units Unit Cost
7/1 Beginning Inventory 100 10
7/5 Purchases 500 15
7/15 Sales 400
7/20 Purchases 200 20
Solutions
Expert Solution
:: FIFO Method
>> Ending Inventory = ( 200 * $ 20 ) + ( 200 * $ 15 )
>> Ending Inventory = $ 7000.
>> Cost of Goods sold = ( 100 * $ 10 ) + ( 300 * 15 )
>> Cost of Goods sold = $ 5,500.
:: LIFO Method
>> Ending Inventory = ( 200 * $ 20 ) = + ( $ 100 * $ 10 ) + ( 100 * $ 15 )
>> Ending Inventory = $ 6,500.
>> Cost of Goods sold = 400 * $ 15
>> Cost of Goods sold = $ 6,000.
:: Weighted Average Method
>> Average cost on 15th July = ( $ 1000 + $ 7500 ) / 600
>> Average cost on 15th July = $ 14.167.
>> Average cost on 20th July = [ ( 200 * 14.167 ) + $ 2,000 ] / 400
>> Average cost on 20th July = $ 12.0835
>> Ending Inventory = 400 * $ 12.0835
>> Ending Inventory = $ 4,833
>> Cost of Goods sold = 400 * $ 14.167
>> Cost of Goods sold = $ 5,667
ekkarill92 answered 2 years agoRelated Solutions
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