Question

Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.

Transactions		Units			Unit Cost
Beginning inventory, January 1			1,800		$	50
Transactions during the year:
a.	Purchase, January 30		2,500			62
b.	Sale, March 14 ($100 each)		(1,450	)
c.	Purchase, May 1		1,200			80
d.	Sale, August 31 ($100 each)		(1,900	)

Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1.

Amount of Goods Available for Sale Ending Inventory Cost of Goods Sold a. Last-in, first-out b. Weighted average cost c. First-in, first-out d. Specific identification

Answer 1

LIFO
Date	Particulars	Units	Cost	Amount	COGS
Jan 01	Beginning Inventory	1,800.00	50.00	90,000.00
Jan 30	Purchase	2,500.00	62.00	155,000.00
May 01	Purchase	1,200.00	80.00	96,000.00
	Total available for sale	5,500.00		341,000.00
Mar 14	COGS	1,450.00		111,500.00	1200*80 + 250*62
Aug 31	COGS	1,900.00		117,800.00	1900*62
	Ending Inventory	2,150.00		111,700.00
Total available for sale	341,000.00
COGS	229,300.00
Ending Inventory	111,700.00
Weighted Average
Date	Particulars	Units	Cost	Amount	COGS
Jan 01	Beginning Inventory	1,800.00	50.00	90,000.00
Jan 30	Purchase	2,500.00	62.00	155,000.00
May 01	Purchase	1,200.00	80.00	96,000.00
	Total available for sale	5,500.00	62.00	341,000.00
Mar 14	COGS	1,450.00	62.00	89,900.00	1450*62
Aug 31	COGS	1,900.00	62.00	117,800.00	1900*62
	Ending Inventory	2,150.00	62.00	133,300.00	2150*62
Total available for sale	341,000.00
COGS	207,700.00
Ending Inventory	133,300.00
FIFO
Date	Particulars	Units	Cost	Amount	COGS
Jan 01	Beginning Inventory	1,800.00	50.00	90,000.00
Jan 30	Purchase	2,500.00	62.00	155,000.00
May 01	Purchase	1,200.00	80.00	96,000.00
	Total available for sale	5,500.00		341,000.00
Mar 14	COGS	1,450.00		72,500.00	1450*50
Aug 31	COGS	1,900.00		113,600.00	350*50+1550*62
	Ending Inventory	2,150.00		154,900.00	950*62+1200*80
Total available for sale	341,000.00
COGS	186,100.00
Ending Inventory	154,900.00
Specific Identification method
Date	Particulars	Units	Cost	Amount	COGS
Jan 01	Beginning Inventory	1,800.00	50.00	90,000.00
Jan 30	Purchase	2,500.00	62.00	155,000.00
May 01	Purchase	1,200.00	80.00	96,000.00
	Total available for sale	5,500.00		341,000.00
Mar 14	COGS	1,450.00		82,940.00	580*50+870*62
Aug 31	COGS	1,900.00		115,400.00	1220*50+680*80
	Ending Inventory	2,150.00		142,660.00	1630*62 + 520*80
Total available for sale	341,000.00
COGS	198,340.00
Ending Inventory	142,660.00