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FIFO, LIFO, WEIGHTED AVERAGE

- Determine cost of beginning inventory and each purchase, each sale, ending inventory

Beginning inventory 100 units at 150

Purchases

January 3: 100 units at 50

February 10: 150 units at 45

June 3: 90 units at 60

August 2: 200 units at 40

October 10: 210 units at 40

Sales:

January 4: 40 units

March 11: 30 units

June 31: 50 units

September 10: 80 units

November 2: 50 units

After determining the cost of beginning inventory and each purchase, each sale, ending inventory fill in the spreadsheet.

WTD AVE GOODS PURCHASED COST OF GOODS SOLD INVENTORY BALANCE AVG COST date 1/2 1/3 MEGINNING BALANCE $50.00 $5,000.00 $50.00

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Answer #1

1) FIFO Method:-

Calculation of Cost of Goods Sold and Ending Inventory (Amounts in $)

Date Purchases Cost of Goods Sold Ending balance
Qty (a) Unit Cost (b) Total Cost (a*b) Qty (c) Unit Cost (d) Total Cost (c*d) Qty (e) Unit Cost (f) Total Cost (e*f)
Beg Inv 100 150 15,000
Jan 3 100 50 5,000 100 150 15,000
100 50 5,000
Jan 4 40 150 6,000 60 150 9,000
100 50 5,000
Feb 10 150 45 6,750 60 150 9,000
100 50 5,000
150 45 6,750
Mar 11 30 150 4,500 30 150 4,500
100 50 5,000
150 45 6,750
Jun 3 90 60 5,400 30 150 4,500
100 50 5,000
150 45 6,750
90 60 5,400
Jun 30 30 150 4,500 80 50 4,000
20 50 1,000 150 45 6,750
90 60 5,400
Aug 2 200 40 8,000 80 50 4,000
150 45 6,750
90 60 5,400
200 40 8,000
Sep 10 80 50 4,000 150 45 6,750
90 60 5,400
200 40 8,000
Oct 10 210 40 8,400 150 45 6,750
90 60 5,400
200 40 8,000
210 40 8,400
Nov 2 50 45 2,250 100 45 4,500
90 60 5,400
200 40 8,000
210 40 8,400
Total 750 33,550 250 22,250 600 26,300

Therefore cost of goods sold is $22,250 and cost of ending inventory is $26,300 under FIFO.

2) LIFO Method:-

Calculation of Cost of Goods Sold and Ending Inventory (Amounts in $)

Date Purchases Cost of Goods Sold Ending balance
Qty (a) Unit Cost (b) Total Cost (a*b) Qty (c) Unit Cost (d) Total Cost (c*d) Qty (e) Unit Cost (f) Total Cost (e*f)
Beg Inv 100 150 15,000
Jan 3 100 50 5,000 100 150 15,000
100 50 5,000
Jan 4 40 50 2,000 100 150 15,000
60 50 3,000
Feb 10 150 45 6,750 100 150 15,000
60 50 3,000
150 45 6,750
Mar 11 30 45 1,350 100 150 15,000
60 50 3,000
120 45 5,400
Jun 3 90 60 5,400 100 150 15,000
60 50 3,000
120 45 5,400
90 60 5,400
Jun 30 50 60 3,000 100 150 15,000
60 50 3,000
120 45 ​​​​​​​5,400
40 60 2,400
Aug 2 200 40 8,000 100 150 15,000
60 50 ​​​​​​​3,000
120 45 ​​​​​​​5,400
40 60 2,400
200 40 8,000
Sep 10 80 40 3,200 100 150 15,000
60 50 ​​​​​​​3,000
120 45 ​​​​​​​5,400
40 60 2,400
120 40 4,800
Oct 10 210 40 8,400 100 150 15,000
60 50 ​​​​​​​3,000
120 45 ​​​​​​​5,400
40 60 2,400
120 40 4,800
210 40 8,400
Nov 2 50 40 2,000 100 150 15,000
60 50 ​​​​​​​3,000
120 45 ​​​​​​​5,400
40 60 2,400
120 40 4,800
160 40 6,400
Total 750 33,550 250 11,550 600 37,000

Therefore cost of goods sold is $11,550 and cost of ending inventory is $37,000 under LIFO.

3) Weighted Average Method:-

Calculation of Cost of Goods Sold and Ending Inventory (Amounts in $)

Date Purchases Cost of Goods Sold Ending balance
Qty (a) Unit Cost (b) Total Cost (a*b) Qty (c) Unit Cost (d) Total Cost (c*d) Qty (e) Unit Cost (f) Total Cost (g = e*f)
Beg Inv 100 150 15,000
Jan 3 100 50 5,000 100 150 15,000
100 50 5,000
Average (g/e) 200 100 20,000
Jan 4 40 100 4,000 160 100 16,000
Feb 10 150 45 6,750 160 100 16,000
150 45 6,750
Average (g/e) 310 73.3871 22,750
Mar 11 30 73.3871 2,202 280 73.3871 20,548
Jun 3 90 60 5,400 280 73.3871 20,548
90 60 5,400
Average (g/e) 370 70.12973 25,948
Jun 30 50 70.12973 3,506 320 70.12973 22,442
Aug 2 200 40 8,000 320 70.12973 22,442
200 40 8,000
Average (g/e) 520 58.54231 30,442
Sep 10 80 58.54231 4,683 440 58.54231 25,759
Oct 10 210 40 8,400 440 58.54231 25,759
210 40 8,400
Average (g/e) 650 52.55231 34,159
Nov 2 50 52.55231 2,628 600 52.55231 31,531
Total 750 33,550 250 17,019 600 31,531

Therefore cost of goods sold is $17,019 and cost of ending inventory is $31,531 under weighted average method.

(Under this method average cost is calculated after each purchase by dividing total cost of goods available for sale by total units available for sale).

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