Question

Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1:

Inv Dec 31 prior year Units 2000 - $5 (unit cost)

Puchase march 21 : 5000 - $6

Purchase August 1: 3000 - $8

Inventory December 31 current year 4000: (blank)

Ending inventory (FIFO/LIFO/AVG COST)

Cost of goods sold (FIFO/LIFO/Avg Cost)

Answer 1

Total units available for sale = 2000 + 5000 + 3000 = 10000 units

Ending Inventory = 4000 units

Units sold = 10000 units – 4000 units = 6000 units

	Ending inventory	COGS
FIFO	$30000	$34000
LIFO	$22000	$42000
Average cost	$25600	$38400

Periodic FIFO :-

	Cost of Goods Available for Sale	Cost of Goods Sold	Ending Inventory
	# of units	Cost pu	Cost of Goods Available for Sale	# of units	Cost pu	Cost of Goods Sold	# of units	Cost pu	Ending Inventory
Beginning Inventory	2000	$5	$10000	2000	$5	$10000	-		-
Purchases:-
March 21	5000	$6	$30000	4000	$6	$24000	1000	$6	$6000
August 1	3000	$8	$24000	-		-	3000	$8	$24000
Total	10000		$64000	6000		$34000	4000		$30000

Periodic LIFO :-

	Cost of Goods Available for Sale	Cost of Goods Sold	Ending Inventory
	# of units	Cost pu	Cost of Goods Available for Sale	# of units	Cost pu	Cost of Goods Sold	# of units	Cost pu	Ending Inventory
Beginning Inventory	2000	$5	$10000				2000	$5	$10000
Purchases:-
March 21	5000	$6	$30000	3000	$6	$18000	2000	$6	$12000
August 1	3000	$8	$24000	3000	$8	$24000
Total	10000		$64000	6000		$42000	4000		$22000

Average Cost :-

	Cost of Goods Available for Sale	Cost of Goods Sold	Ending Inventory
	# of units	Cost pu	Cost of Goods Available for Sale	# of units	Cost pu	Cost of Goods Sold	# of units	Cost pu	Ending Inventory
Beginning Inventory	2000	$5	$10000	6000       $6.40      $38400	4000       $6.40         $25600
Purchases:-
March 21	5000	$6	$30000
August 1	3000	$8	$24000
Total	10000		$64000	6000		$38400	4000		$25600

Average cost per unit = Cost of goods available for sale/units available for sale

                  = $64000/10000 = $6.40