Question

[The following information applies to the questions displayed below.] 10 During the year, a company has the following inventory transactions. Number Unit Date Transaction of Units Cost Total Cost Jan. 1 Beginning inventory $ 12 $ 120 Mar. 4 Purchase 15 11 165 Jun. 9 Purchase 20 200 Nov.11 Purchase 160 $ 645 10 : 65 For the entire year, the company sells 50 units of inventory for $20 each. Required: 1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit. FIFO Cost of Goods Sold Ending Inventory Cost of Goods Available for Sale Cost of # of units Cost per Goods unit Available for Sale 10 $ 12 $ 120 # of units Cost per unit Cost of Goods Sold # of units Cost Ending per unit Inventory 10 $ 12 $ 120 Beginning Inventory Purchases: Mar 04 15 20 $ $ $ 8 11 100 165 200 Jun 09 Nov 11 Total 15 $ 200 $ $ 11 10 8 165 200 0 0 45 $ 485 Sales revenue Gross profit

Answer 1

Answers

• [1]

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	10	$                12.00	$                            120.00	10	$               12.00	$                     120.00	0	$                 12.00	$                         -
Purchases:
04-Mar	15	$                11.00	$                            165.00	15	$               11.00	$                     165.00	0	$                 11.00	$                         -
09-Jun	20	$                10.00	$                            200.00	20	$               10.00	$                     200.00	0	$                 10.00	$                         -
11-Nov	20	$                   8.00	$                            160.00	5	$                 8.00	$                       40.00	15	$                   8.00	$                120.00
TOTAL	65		$                            645.00	50		$                     525.00	15		$                120.00

	FIFO
Sales Revenue	$      1,000.00
(-) Cost of Goods Sold (as calculated above)	$          525.00
Gross Margin	$          475.00

• [2]

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	10	$                12.00	$                            120.00	0	$               12.00	$                              -	10	$                 12.00	$                120.00
Purchases:
04-Mar	15	$                11.00	$                            165.00	10	$               11.00	$                     110.00	5	$                 11.00	$                  55.00
09-Jun	20	$                10.00	$                            200.00	20	$               10.00	$                     200.00	0	$                 10.00	$                         -
11-Nov	20	$                   8.00	$                            160.00	20	$                 8.00	$                     160.00	0	$                   8.00	$                         -
TOTAL	65		$                            645.00	50		$                     470.00	15		$                175.00

	LIFO
Sales Revenue	$              1,000.00
(-) Cost of Goods Sold (as calculated above)	$                  470.00
Gross Margin	$                  530.00

• [3]

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	10	$               12.00	$                            120.00
Purchases:
04-Mar	15	$                11.00	$                            165.00
09-Jun	20	$                10.00	$                            200.00
11-Nov	20	$                   8.00	$                            160.00
TOTAL	65	$                9.923	$                            645.00	50	$             9.9200	$                     496.00	15	$              9.9200	$                148.80

	Weighted Average Method
Sales Revenue	$                 1,000.00
(-) Cost of Goods Sold (as calculated above)	$                     496.00
Gross Margin	$                     504.00