Question

Periodic Inventory by Three Methods

The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are as follows:

Date	Transaction	Number of Units		Per Unit		Total
Apr. 3	Inventory	25		$1,200		$30,000
8	Purchase	75		1,240		93,000
11	Sale	40		2,000		80,000
30	Sale	30		2,000		60,000
May 8	Purchase	60		1,260		75,600
10	Sale	50		2,000		100,000
19	Sale	20		2,000		40,000
28	Purchase	80		1,260		100,800
June 5	Sale	40		2,250		90,000
16	Sale	25		2,250		56,250
21	Purchase	35		1,264		44,240
28	Sale	44		2,250		99,000

Required:

1. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the first-in, first-out method and the periodic inventory system. Round the weighted average unit cost to the nearest cent.

Inventory, June 30	$fill in the blank 1
Cost of goods sold	$fill in the blank 2

2. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the last-in, first-out method and the periodic inventory system.

Inventory, June 30	$fill in the blank 3
Cost of goods sold	$fill in the blank 4

3. Determine the inventory on June 30 and the cost of goods sold for the three-month period, using the weighted average cost method and the periodic inventory system.

Note: Round the weighted average unit cost to the nearest dollar and final answers to the nearest dollar.

Inventory, June 30	$fill in the blank 5
Cost of goods sold	$fill in the blank 6

4. Compare the gross profit and June 30 inventories using the following column headings. Enter all amounts as positive numbers.

	FIFO	LIFO	Weighted Average
Sales	$fill in the blank 7	$fill in the blank 8	$fill in the blank 9
Cost of goods sold	fill in the blank 10	fill in the blank 11	fill in the blank 12
Gross profit	$fill in the blank 13	$fill in the blank 14	$fill in the blank 15
Inventory, June 30	$fill in the blank 16	$fill in the blank 17	$fill in the blank 18

Answer 1

• Working for sales

Sales	Units	Rate	Amount
	140	$    2,000.00	$     280,000.00
	109	$    2,250.00	$     245,250.00
Total	249		$     525,250.00

• All working forms part of the answer
• [1]

	FIFO Method
Cost of Ending Inventory	$     32,864
Cost of goods sold	$   310,776

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	25	$          1,200.00	$                      30,000.00	25	$         1,200.00	$               30,000.00	0	$           1,200.00	$                         -
Purchases:
08-Apr	75	$          1,240.00	$                      93,000.00	75	$         1,240.00	$               93,000.00	0	$           1,240.00	$                         -
08-May	60	$          1,260.00	$                      75,600.00	60	$         1,260.00	$               75,600.00	0	$           1,260.00	$                         -
28-May	80	$          1,260.00	$                    100,800.00	80	$         1,260.00	$            100,800.00	0	$           1,260.00	$                         -
21-Jun	35	$          1,264.00	$                      44,240.00	9	$         1,264.00	$               11,376.00	26	$           1,264.00	$          32,864.00
TOTAL	275		$                    343,640.00	249		$            310,776.00	26		$          32,864.00

• [2]

	LIFO Method
Cost of Ending Inventory	$       31,240
Cost of goods sold	$     312,400

LIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	25	$          1,200.00	$                      30,000.00	0	$         1,200.00	$                              -	25	$           1,200.00	$          30,000.00
Purchases:
08-Apr	75	$          1,240.00	$                      93,000.00	74	$         1,240.00	$               91,760.00	1	$           1,240.00	$            1,240.00
08-May	60	$          1,260.00	$                      75,600.00	60	$         1,260.00	$               75,600.00	0	$           1,260.00	$                         -
28-May	80	$          1,260.00	$                    100,800.00	80	$         1,260.00	$            100,800.00	0	$           1,260.00	$                         -
21-Jun	35	$          1,264.00	$                      44,240.00	35	$         1,264.00	$               44,240.00	0	$           1,264.00	$                         -
TOTAL	275		$                    343,640.00	249		$            312,400.00	26		$          31,240.00

• [3]

	Average-Cost Method
Cost of Ending Inventory	$       32,500.00
Cost of goods sold	$     311,250.00

Average Method	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	25	$         1,200.00	$                      30,000.00
Purchases:
08-Apr	75	$          1,240.00	$                      93,000.00
08-May	60	$          1,260.00	$                      75,600.00
28-May	80	$          1,260.00	$                    100,800.00
21-Jun	35	$          1,264.00	$                      44,240.00
TOTAL	275	$      1,249.6000	$                    343,640.00	249	$    1,250.0000	$            311,250.00	26	$      1,250.0000	$          32,500.00

• [4]

	FIFO	LIFO	Weighted Average
Sales	$      525,250.00	$                    525,250.00	$ 525,250.00
Cost of goods sold	$      310,776.00	$                    312,400.00	$ 311,250.00
Gross profit	$      214,474.00	$                    212,850.00	$ 214,000.00
Inventory, June 30	$        32,864.00	$                      31,240.00	$     32,500.00