Question

Jimmie’s Fishing Hole has the following transactions related to its top-selling Shimano fishing reel for the month of June. Jimmie’s Fishing Hole uses a periodic inventory system.

Date			Transactions	Units	Unit Cost					Total Cost
June	1		Beginning inventory	16		$	190				$	3,040
June	7		Sale	11
June	12		Purchase	10			180					1,800
June	15		Sale	12
June	24		Purchase	10			170					1,700
June	27		Sale	8
June	29		Purchase	9			160					1,440
											$	7,980

Required:
1. Calculate ending inventory and cost of goods sold at June 30, using the specific identification method. The June 7 sale consists of fishing reels from beginning inventory, the June 15 sale consists of three fishing reels from beginning inventory and nine fishing reels from the June 12 purchase, and the June 27 sale consists of one fishing reel from beginning inventory and seven fishing reels from the June 24 purchase.

Jimmie’s Fishing Hole has the following transactions related to its top-selling Shimano fishing reel for the month of June. Jimmie’s Fishing Hole uses a periodic inventory system.

Date			Transactions	Units	Unit Cost					Total Cost
June	1		Beginning inventory	16		$	190				$	3,040
June	7		Sale	11
June	12		Purchase	10			180					1,800
June	15		Sale	12
June	24		Purchase	10			170					1,700
June	27		Sale	8
June	29		Purchase	9			160					1,440
											$	7,980

2. Using FIFO, calculate ending inventory and cost of goods sold at June 30.

Answer 1

1. Ending Inventory and Cost of Goods Sold

	Qty	Rate	Amount
Beginning Inventory	16	$190	$3,040
Add : Purchases of 12th	10	$180	$1,800
Add : Purchases of 24th	10	$170	$1,700
Add : Purchases of 29th	9	$160	$1,440
	45		$7,980
Less:Sale on 7th	11	$190	$2,090
Less : Sale on 15th (3 from Beginning)	3	$190	$570
Less : Sale on 15th (9 from 12th Purchase)	9	$180	$1,620
Less : Sale on 27th (1 from Beginning)	1	$190	$190
Less : Sale on 27th (7 from 24th Purchase)	7	$170	$1,190
Ending Inventory	14		$2,320

Cost of Goods Sold is Beginning Inventory + Purchases - Ending Inventory

Cost of Good Sold = $3,040 + $4,940 - $ 2,320 = $ 5,660

2. Ending Inventory and Cost of Goods Sold as per FIFO (First In First Out)

	Qty	Rate	Amount
Beginning Inventory	16	$190	$3,040
Less : Sale of 7th June	11	$190	$2,090
Balance	5	$190	$950
Add : Purchase of 12th June	10	$180	$1,800
Less : Sale of 15th (5 from Beginning)	5	$190	$950
Less : Sale of 15th (7 from Purchase of 12th June)	7	$180	$1,260
Balance	3	$180	$540
Add : Purchase of 24th June	10	$170	$1,700
Less : Sale of 27th (3 from Balance)	3	$180	$540
Less : Sale of 27th (5 from Purchase of 24th June)	5	$170	$850
Balance	5	$170	$850

Add : Purchase of 24th June	9	$160	$1,440
Ending Inventory (Balance+Purchase of 24th June	14		($850+$1,440)=$2,290
Cost of Goods Sold ($3,040 + $4,940 - $ 2,290 = $ 5,690