Question

Ferris Company began 2018 with 7,000 units of its principal product. The cost of each unit is $6. Merchandise transactions for the month of January 2018 are as follows: Purchases Date of Purchase Units Unit Cost* Total Cost Jan. 10 6,000 $ 7 $ 42,000 Jan. 18 7,000 8 56,000 Totals 13,000 98,000 *Includes purchase price and cost of freight. Sales Date of Sale Units Jan. 5 3,000 Jan. 12 1,000 Jan. 20 4,000 Total 8,000 12,000 units were on hand at the end of the month. Required: Calculate January's ending inventory and cost of goods sold for the month using each of the following alternatives: 1. FIFO, periodic system. 2. LIFO, periodic system. 3. LIFO, perpetual system. 4. Average cost, periodic system. 5. Average cost, perpetual system.

Answer 1

Beg	7000	6	42000
Jan-10	6000	7	42000
Jan-18	7000	8	56000
Total Cost of Goods available for Sale	20000		140000

Jan-05	3000
Jan-12	1000
Jan-20	4000
Total Cost of Goods available for Sale	8000

FIFO Periodical
Cost of Goods Sold
Beg	7000	6	42000
	1000	7	7000
Cost of Goods Sold$			$49000
Ending Inventory 140000-49000			91000

LIFO Periodical
Cost of Goods Sold
Jan-18	7000	8	56000
Jan-10	1000	7	7000
Cost of Goods Sold			$63000
Ending Inventory 140000-63000			$77000

	LIFO, perpetual system
Beg	3000	6	18000
Jan-10	1000	7	7000
Jan-18	4000	8	32000
Cost of Goods Sold			57000
Ending Inventory 140000-57000			83000

Average cost, periodic system
Average cost, per Unit =140000/20000	7
cost of Goods sold 8000*7	$56000
Ending Inventory	$84000

Average cost, perpetual system

	Purchase	Rate	Amount	Units Sold	Rate	Amount	Closing stock	Avg Rate	Amount
beg							7000	6	42000
Jan-05				3000	6	18000	-3000		18000
						Cls bal	4000	6	24000
Jan-10	6000	7	42000				6000		42000
						Cls bal	10000	6.6	66000
Jan-12				1000	6.6	6600	-1000		6600
						Cls bal	9000		59400
Jan-18	7000	8	56000				7000		56000
							16000	7.21	115400
Jan-20				4000	7.21	28850	-4000	7.21	-28850
						Cls bal	12000		86550

Closing stock	86550
Cost of Goods sold	53450