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Compute cost of goods sold, assuming Kingbird uses: 1.Perpetual system, FIFO cost flow 2.Perpetual system, LIFO...

Compute cost of goods sold, assuming Kingbird uses:

1.Perpetual system, FIFO cost flow

2.Perpetual system, LIFO cost flow

3.

Perpetual system, moving-average cost flow

Kingbird Company is a multi product firm. Presented below is information concerning one of its products, the Hawkeye.

Date	Transaction	Quantity	Price/Cost
1/1	Beginning inventory	3,500	$19
2/4	Purchase	4,500	28
2/20	Sale	5,000	47
4/2	Purchase	5,500	36
11/4	Sale	4,700	52

Expert Solution

1

Perpetual system, FIFO cost flow =$253,700

Perpetual system, FIFO cost flow=$304,700

Perpetual system, moving-average cost flow=$279,726

Working notes for the above answer is as under

1

FIFO

Date	Purchased		Cost of goods sold		Balance
1-Jan	3500 @ $19	$66,500			3500 @ $19	$66,500
4-Feb	4500 @ $28	$126,000			3500 @ $19	$192,500
4-Feb	4500 @ $28	$126,000			4500 @28	$192,500

20-Feb			3500 @ $19	66,500
			1500 @ $28	42000	3000 @28	$84,000

2-Apr	5500 @ $36	$198,000			3000 @28	$84,000
					5500 @36	$198,000

4-Nov			3000 @ $28	84,000
			1700 @ $36	61,200	3800 @36	$136,800
				253,700

2

LIFO

Date	Purchased		Cost of goods sold		Balance
31-Dec	3500 @ $19	$66,500			3500 @ $19	$66,500
3-Feb	4500 @ $28	$126,000			3500 @ $19	$192,500
3-Feb	4500 @ $28	$126,000			4500 @28	$192,500

19-Feb			4500 @ $28	126,000
			500 @ $19	9500	3000 @19	$57,000

1-Apr	5500 @ $36	$198,000			3000 @19	$57,000
					5500 @36	$198,000

3-Nov			4700 @ $36	169,200	3000 @19	$57,000
					800 @36	$28,800
				304,700

3

Moving g average

Date	Purchased		Sold or Issued		Balance
31-Dec	3500 @ $19	$66,500			3500 @ $19	$66,500
3-Feb	4500 @ $28	$126,000			3500 @ $19	$66,500
					4500 @ $28	$126,000
					8000 @24.0625	$192,500

19-Feb			5000 @ $24.0625	$130,313
					3000 @ $24.0625	$72,188

1-Apr	5500 @ $36	$198,000			3000 @ $24.0625	$72,188
					5500 @ $36	$198,000
					8500 @31.79	$270,188

3-Nov			4700 @ $31.79	$149,413
				$279,726	3800 @ $31.79	$120,802

ekkarill92 answered 2 years ago

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