Question

PB7-1 Analyzing the Effects of Four Alternative Inventory Methods in a Periodic Inventory System [LO 7-3] Mojo Industries 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 accounting period, January 31. The inventory’s selling price is $12 per unit. Transactions Unit Cost Units Total Cost Inventory, January 1 $ 4.00 190 $ 760 Sale, January 10 (150 ) Purchase, January 12 4.50 240 1,080 Sale, January 17 (110 ) Purchase, January 26 5.50 70 385 Assuming that for Specific identification method (item 1d) the January 10 sale was from the beginning inventory and the January 17 sale was from the January 12 purchase. Required: 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January 31 under each of the following inventory costing methods: (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)

Answer 1

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		Unit Cost	Unit	Total Cost	Sold Units
Jan 1	Beginning	4	190	760
Jan 10	Sale				-150
Jan 12	Purchase	4.5	240	1080
Jan 17	Sale				-110
Jan 26	Purchase	5.5	70	385
Total Pruchase			500
Sale			260
Closing			240
	Goods Availabel for Sale $	Ending inventory $	Cost of goods sold $
Weighted Average	2225	1068	1157
240*4.45
260*4.45
FIFO	2225	1150	1075
LIFO	2225	1270	1240
Specific ID	2225	1130	1095
Working:
Weighted Average
Goods Available for sale	760+1080+385=2225
Average Purchase Price:
Total Purchase Cost	760+1080+385=2225
Total Purchase Units	190+240+70=500
Weighted Average Cost	2225/500=4.45
FIFO:
Cost of Goods Sold:
Units	Cost	Total Cost
190	4	760
70	4.5	315
260		1075
Ending Inventory
Units	Cost	Total Cost
170	4.5	765
70	5.5	385
240		1150
LIFO
Cost of Goods Sold:
Units	Cost	Total Cost
70	5.5	385
190	4.5	855
260		1240
Ending Inventory
Units	Cost	Total Cost
50	4.5	225
190	5.5	1045
240		1270
Specific Id
Cost of Goods Sold:
Units	Cost	Total Cost
150	4	600
110	4.5	495
260		1095
Ending Inventory
Units	Cost	Total Cost
40	4	160
130	4.5	585
70	5.5	385
240		1130