Question

Concord Corporation Inc. had a beginning inventory of 100 units of Product RST at a cost of $6 per unit. During the year, purchases were:

Feb. 20		585 units		at		$7		Aug. 12		405 units		at		$9
May 5		495 units		at		$8		Dec. 8		100 units		at		$10

Concord Corporation uses a periodic inventory system. Sales totaled 1,570 units.

Determine the ending inventory and the cost of goods sold under each of the assumed cost flow methods (FIFO, LIFO, and average-cost). Prove the accuracy of the cost of goods sold under the FIFO and LIFO methods. (Round per unit cost to 3 decimal places, e.g. 15.647 and final answers to 0 decimal places, e.g. 5,125.)

Answer 1

1]	Cost of goods available for sale:
	Month	Qty	Cost per Unit	Total Cost
	Beginning inventory	100	$           6.000	$ 600
	Feb 20 Purhcases	585	$           7.000	$            4,095
	May 05 - Purchases	495	$           8.000	$            3,960
	Aug 12 - Purchases	405	$           9.000	$            3,645
	Dec 8 - Purchases	100	$         10.000	$            1,000
		1685	$           7.893	$          13,300
	Sales units	1570	Avg. Cost
	Ending inventory	115
2]		FIFO	LIFO	Avg. Cost
	Ending inventory:
	=100*10+15*9 =	$             1,135
	=100*6+15*7 =		$               705
	=115*7.893 =			$                908
	Cost of goods sold [13300 (Cost of goods available for sale-Cost of ending inventory)]	$           12,165	$         12,595	$          12,392
3]	CHECK for COGS:
	=100*6+585*7+495*8+390*9 =	$           12,165
	=100*10+405*9+495*8+570*7 =		$         12,595
	=1570*7.893 =			$          12,392