Question

Aircard Corporation tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period as if it uses a periodic inventory system. The following are the transactions for the month of July.

		Units	Unit Cost
July 1	Beginning Inventory	2,000	$	35
July 5	Sold	1,000
July 13	Purchased	6,000		37
July 17	Sold	3,000
July 25	Purchased	8,000		39
July 27	Sold	5,000

Weighted Average Cost FIFO LIFO $ 604,000 $ 604,000$ Cost of Goods Available for Sale 604,000 Ending Inventory Cost of Goods Sold

Calculate the cost of goods available for sale, ending inventory, and cost of goods sold if Aircard uses (a) FIFO, (b) LIFO, or (c) weighted average cost. (Round "Cost per Unit" to 2 decimal places.)

Answer 1

	Periodic	FIFO	LIFO	Weighted Average
	Cost of goods available for sale	$ 604,000	$ 604,000	$ 604,000
	Ending Inventory	$ 273,000	$ 255,000	$ 264,250
	Cost of goods sold	$ 331,000	$ 349,000	$ 339,750
	Workings:
1A	FIFO	Cost of goods available for sale			Cost of goods sold - Periodic FIFO			Ending Inventory - Periodic FIFO
	Beginning Inventory	2,000	$             35	$     70,000	2,000	$          35	$     70,000	-	$          35	$              -
	Purchases:
	Jul-13	6,000	$             37	$ 2,22,000	6,000	$          37	$ 2,22,000	-	$          37	$              -
	Jul-25	8,000	$             39	$ 3,12,000	1,000	$          39	$     39,000	7,000	$          39	$ 2,73,000
		16,000		$ 6,04,000	9,000		$ 3,31,000	7,000		$ 2,73,000
1B	LIFO	Cost of goods available for sale			Cost of goods sold - Periodic LIFO			Ending Inventory - Periodic LIFO
	Beginning Inventory	2,000	$             35	$     70,000	-	$          35	$              -	2,000	$          35	$     70,000
	Purchases:
	May-10	6,000	$             37	$ 2,22,000	1,000	$          37	$     37,000	5,000	$          37	$ 1,85,000
	Aug-18	8,000	$             39	$ 3,12,000	8,000	$          39	$ 3,12,000	-	$          39	$              -
		16,000		$ 6,04,000	9,000		$ 3,49,000	7,000		$ 2,55,000
1C	Average Cost	Cost of goods available for sale			Cost of goods sold - Average Cost			Ending Inventory - Average Cost
	Beginning Inventory	2,000	$             35	$     70,000
	Purchases:
	May-10	6,000	$             37	$ 2,22,000
	Aug-18	8,000	$             39	$ 3,12,000
		16,000		$ 6,04,000	9,000	$    37.75	$ 3,39,750	7,000	$    37.75	$ 2,64,250
	*Average Cost	=	Cost of goods available for sale / No. Of units
		=	$604000/16000 units
		=	$                                                                                                                                                                           37.75