Question

In: Accounting

Use the following information to calculate the ending inventory cost on December 31 and the cost...

Use the following information to calculate the ending inventory cost on December 31 and the cost of goods sold for December under each of three methods: (a) FIFO, (b) LIFO, and (c) Weighted Average.

Assume the periodic inventory system is used. (Show your work.)

Dec. 1 Beginning inventory 1,000 units @ $7

Dec. 5 Purchased 3,000 units @ $7.10

Dec. 18 Purchased 4,000 units @ $7.15

Dec. 24 Purchased 2,000 units @ $7.20

Dec. 31 Ending inventory 2,500 units

Solutions

Expert Solution

Unit Unit Cost Total Cost
Beginning inventory 1000 7 7000
Purchase dec 5 3000 7.10 21300
Purchase dec 18 4000 7.15 28600
Purchase Dec 24 2000 7.20 14400
Total 10000 71300

Calculate ending inventory

FIFO = 2000*7.2+500*7.15 = $17975

LIFO = 1000*7+1500*7.10 = $17650

Weighted average = 71300/10000*2500 = $17825


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