Question

Required information

[The following information applies to the questions displayed below.]


Ferris Company began January with 6,000 units of its principal product. The cost of each unit is $6. Merchandise transactions for the month of January are as follows:

	Purchases
Date of Purchase	Units		Unit Cost*			Total Cost
Jan. 10	5,000		$	7			$	35,000
Jan. 18	6,000			8				48,000
Totals	11,000							83,000

* Includes purchase price and cost of freight.

Sales
Date of Sale	Units
Jan. 5	3,000
Jan. 12	2,000
Jan. 20	4,000
Total	9,000

8,000 units were on hand at the end of the month.

2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.

Answer 1

Solution

	Cost of Ending inventory	Cost of goods sold
FIFO	$               62,000	$                 57,000

Working

FIFO
Total Units Avalable for sale		17000
Units Sold		9000
Closing Stock in Units		8000
Valuation
Ending Inventory	6000	@	$               8.00	$ 48,000
	2000	@	$               7.00	$ 14,000
Value Of Ending Inventory				$            62,000
Cost of Goods sold				$            57,000