Question

Sandra’s Purse Boutique has the following transactions related to its top-selling Gucci purse for the month of October. Sandra's Purse Boutique uses a periodic inventory system.

Date			Transactions	Units				Unit Cost				Total Cost
October	1		Beginning inventory		6			$	900				$	5,400
October	4		Sale		4
October	10		Purchase		5				910					4,550
October	13		Sale		3
October	20		Purchase		4				920					3,680
October	28		Sale		7
October	30		Purchase		7				930					6,510
													$	20,140

1. Calculate ending inventory and cost of goods sold at October 31, using the specific identification method. The October 4 sale consists of purses from beginning inventory, the October 13 sale consists of one purse from beginning inventory and two purses from the October 10 purchase, and the October 28 sale consists of three purses from the October 10 purchase and four purses from the October 20 purchase.

2. Using FIFO, calculate ending inventory and cost of goods sold at October 31

3. Using LIFO, calculate ending inventory and cost of goods sold at October 31.

4. Using weighted-average cost, calculate ending inventory and cost of goods sold at October 31. (Round your intermediate and final answers to 2 decimal places.)

Answer 1

Solution 1:

Computation of COGS and ending inventory - Specific identification
Particulars	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	6	$900.00	$5,400	5	$900.00	$4,500.00	1	$900.00	$900.00
Purchases:
10-Oct	5	$910.00	$4,550	5	$910.00	$4,550.00	0	$910.00	$0.00
20-Oct	4	$920.00	$3,680	4	$920.00	$3,680.00	0	$920.00	$0.00
30-Oct	7	$930.00	$6,510	0	$930.00	$0.00	7	$930.00	$6,510.00
Total	22		$20,140	14		$12,730.00	8		$7,410.00

Solution 2:

Computation of COGS and ending inventory - Periodic FIFO
Particulars	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	6	$900.00	$5,400	6	$900.00	$5,400.00	0	$900.00	$0.00
Purchases:
10-Oct	5	$910.00	$4,550	5	$910.00	$4,550.00	0	$910.00	$0.00
20-Oct	4	$920.00	$3,680	3	$920.00	$2,760.00	1	$920.00	$920.00
30-Oct	7	$930.00	$6,510	0	$930.00	$0.00	7	$930.00	$6,510.00
Total	22		$20,140	14		$12,710.00	8		$7,430.00

Solution 3:

Computation of COGS and ending inventory - Periodic LIFO
Particulars	Cost of goods available for sale			Cost of goods sold			Ending Inventory
	Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	6	$900.00	$5,400	0	$900.00	$0.00	6	$900.00	$5,400.00
Purchases:
10-Oct	5	$910.00	$4,550	3	$910.00	$2,730.00	2	$910.00	$1,820.00
20-Oct	4	$920.00	$3,680	4	$920.00	$3,680.00	0	$920.00	$0.00
30-Oct	7	$930.00	$6,510	7	$930.00	$6,510.00	0	$930.00	$0.00
Total	22		$20,140	14		$12,920.00	8		$7,220.00

Solution 4:

Computation of COGS and ending inventory - Periodic Weighted Average cost method
Particulars	Cost of goods available for sale			Cost of goods sold - Average cost			Ending Inventory - Average cost
	Nos of units	Unit Cost	Cost of goods available for sale	Nos of units sold	Unit Cost	Cost of goods sold	Nos of units in ending inventory	Unit Cost	Ending inventory
Beginning inventory	6	$900.00	$5,400
Purchases:
10-Oct	5	$910.00	$4,550
20-Oct	4	$920.00	$3,680
30-Oct	7	$930.00	$6,510
Total	22	$915.45	$20,140	14	$915.45	$12,816	8	$915.45	$7,324