Question

Ferris Company began 2018 with 6,000 units of its principal product. The cost of each unit is $8. Merchandise transactions for the month of January 2018 are as follows:

	Purchases
Date of Purchase	Units		Unit Cost*			Total Cost
Jan. 10	5,000		$	9			$	45,000
Jan. 18	6,000			10				60,000
Totals	11,000							105,000

* 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.

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.

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

FIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Ending Inventory - Periodic FIFO # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory Beginning Inventory $0 $0.00 $0 $0.00 $0 Purchases: January 10 0 $0.00 0 $0.00 0 January 18 0 $0.00 0 $0.00 0 Total 0 $0 0 $0 0 $0

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

LIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO Ending Inventory - Periodic LIFO # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory Beginning Inventory $0 $0.00 $0 $0.00 $0 Purchases: January 10 0 $0.00 0 $0.00 0 January 18 0 $0.00 0 $0.00 0 Total 0 $0 0 $0 0 $0 Calculate January's ending inventory and cost of goods sold for the month using LIFO, perpetual system. Perpetual LIFO: Cost of Goods Available for Sale Cost of Goods Sold - January 5 Cost of Goods Sold - January 12 Cost of Goods Sold - January 20 Inventory Balance # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units sold Cost per unit Cost of Goods Sold # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory Beg. Inventory $0 $0.00 $0 $0.00 $0 $0.00 $0 $0.00 $0 Purchases: January 10 0 0.00 0 0.00 0 0.00 0 0.00 0 January 18 0 0.00 0 0.00 0 0.00 0 0.00 0 Total 0 $0 0 $0 0 $0 0 $0 0 $0 Calculate January's ending inventory and cost of goods sold for the month using Average cost, periodic system. Average Cost Cost of Goods Available for Sale Cost of Goods Sold - Average Cost Ending Inventory - Average Cost # of units Unit Cost Cost of Goods Available for Sale # of units sold Average Cost per Unit Cost of Goods Sold # of units in ending inventory Average Cost per unit Ending Inventory Beginning Inventory $0 Purchases: January 10 0 January 18 0 Total 0 $0 $0 $0 Calculate January's ending inventory and cost of goods sold for the month using Average cost, perpetual system. (Round average cost per unit to 4 decimal places. Enter sales with a negative sign.) Perpetual Average Inventory on hand Cost of Goods Sold # of units Cost per unit Inventory Value # of units sold Avg.Cost per unit Cost of Goods Sold Beginning Inventory $0 Sale - January 5 0 Subtotal Average Cost 0 0 Purchase - January 10 0 Subtotal Average Cost 0 0 Sale - January 12 0 Subtotal Average Cost 0 0 Purchase - January 18 0 Subtotal Average Cost 0 0 Sale - January 20 0 Total 0 $0 0 $0

Answer 1

FIFO

Cost of Goods Sold:

6,000 units @ $8 = $48,000

3,000 units @ $9 = 27,000

9,000 units = $75,000

Ending Inventory:

6,000 units @ $10 = $60,000

2,000 units @ $9 = 18,000

8,000 units = $78,000

LIFO:

Cost of Goods Sold:

6,000 units @ $10 = $60,000

3,000 units @ $9 = 27,000

9,000 units = $87,000

Ending Inventory:

6,000 units @ $8 = $48,000

2,000 units @ $9 = 18,000

8,000 units = $66,000

a)Available:

Beg 6,000 units @ $8 = $48,000

Cost of Goods Sold:

Beg 3,000 units @ $8 = $24,000

Ending Inventory:

Beg 3,000 units @ $8 = $24,000

b)Available:

Beg 3,000 units @ $8 =$24,000

Jan 10 5,000 units @ $9 =45,000

8,000 units $69,000

Cost of Goods Sold:

Jan 10 2,000 units @ $9 = $18,000

Ending Inventory:

Beg 3,000 units @ $8 =$24,000

Jan 10 3,000 units @ $9 =27,000

6,000 units $51,000

c)Available:

Beg 3,000 units @ $ 8 = 24,000

Jan 10 3,000 units @ $ 9 = 27,000

Jan 18 6,000 units @ $10 =60,000

12,000 units $111,000

Cost of Goods Sold:

Jan 18 4,000 units @ $10 = $ 40,000

Ending Inventory:

Beg 3,000 units @ $ 8 =$24,000

Jan 10 3,000 units @ $ 9 =27,000

Jan 18 2,000 units @ $10 = 20,000

8,000 units $ 71,000

4.

Average cost, periodic system

Cost of goods available for sale (17,000 units) $153,000

Less: Ending inventory (below) (72,000)

Cost of goods sold $ 81,000

Weighted average vost=$153,000/17,000 units =$9

8,000 units × $9 = $72,000

Alternatively, cost of goods sold could be determined by multiplying the units sold by the average cost: 9,000 units × $9 = $81,000.