Question
In: Accounting
Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December...
Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December 31, the accounting records for the most popular item in inventory showed the following:
| Transactions | Units | Unit Cost | |
| Beginning inventory, January 1 | 310 | $6.00 | |
| Transactions during the year: | |||
| a. | Purchase, January 30 | 210 | 2.50 |
| b. | Purchase, May 1 | 370 | 7.00 |
| c. | Sale ($8 each) | (70) | |
| d. | Sale ($8 each) | (610) | |
Required:
a. Compute the amount of goods available for sale.
b. & c. Compute the amount of ending inventory and cost of goods sold at December 31, under Average cost, First-in, first-out, Last-in, first-out and Specific identification inventory costing methods. For Specific identification, assume that the first sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the second sale was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1. (Do not round intermediate calculations. Round "Average Cost and Specific Identification" answers to 2 decimal places.)
Solutions
Expert Solution
a. Amount of goods available for sale: $4975
Working:
| No. of Units | Unit Price $ |
Total $ | |
| Beginning inventory, January 1 | 310 | 6.00 | 1860 |
| Purchases: | |||
| January 30 | 210 | 2.50 | 525 |
| May 1 | 370 | 7.00 | 2590 |
| Total purchases | 580 | 3115 | |
| Goods available for sale | 890 | 4975 |
b. & c.
| Ending Inventory $ | Cost of Goods Sold $ | |
| Average cost | 1173.88 | 3801.12 |
| First-in, first-out | 1470 | 3505 |
| Last-in, first-out | 1260 | 3715 |
| Specific identification | 714 | 4261 |
Working:
| Average cost | Units | Total $ | |
| Goods available for sale | 890 | 5.59 | 4975 |
| Sold | 680 | 5.59 | 3801.124 |
| Ending inventory | 210 | 5.59 | 1173.876 |
| First-in, first-out | |||
| Goods available for sale | 890 | 4975 | |
| Sold (70x$6)+(240x$6)+(210x$2.50)+(160x$7) | 680 | 3505 | |
| Ending inventory (210x$7) | 210 | 1470 | |
| Last-in, first-out | |||
| Goods available for sale | 890 | 4975 | |
| Sold (70x$7)+(300x$7)+(210x$2.50)+(100x$6) | 680 | 3715 | |
| Ending inventory (210x$6) | 210 | 1260 | |
| Specific identification | |||
| Goods available for sale | 890 | 4975 | |
| Sold (28x$6)+(42x$2.50)+(282x$6)+(328x$7) | 680 | 4261 | |
| Ending inventory (168x$2.50)+(42x$7) | 210 | 714 |
ekkarill92 answered 1 year agoRelated Solutions
Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December...
Kirtland Corporation uses a periodic inventory system. At the
end of the annual accounting period, December 31, the accounting
records for the most popular item in inventory showed the
following:
Transactions
Units
Unit Cost
Beginning inventory, January 1
370
$4.00
Transactions during the year:
a.
Purchase, January 30
270
3.10
b.
Purchase, May 1
430
5.00
c.
Sale ($6 each)
(130)
d.
Sale ($6 each)
(670)
Required:
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inventory and cost of goods...
Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December...
Kirtland Corporation uses a periodic inventory system. At the
end of the annual accounting period, December 31, the accounting
records for the most popular item in inventory showed the
following:
Transactions Units Unit
Cost Beginning inventory, January 1 350 $6.00 Transactions
during the year:
a. Purchase, January 30 250 $ 2.90
b. Purchase, May 1 410 $7.00
c. Sale ($8 each) (110)
d. Sale ($8 each) (650)
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Units
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2:
Units
Unit Cost
Inventory, December 31, prior year
2,890
$
12
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8,860
13
Purchase, June 1
7,930
18
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10,860
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$
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accounting records provided the following information for product
1:
Units
Unit Cost
Inventory, December 31, prior year
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8
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Units
Unit Cost
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1,960
$
5
For the current year:
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5,020
7
Purchase, August 1
2,900
8
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4,080
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