In: Accounting
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
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