Question

Nash's Trading Post, LLC began the year with 12 units of marine floats at a cost of $11 each. During the year, it made the following purchases: May 5, 27 unit at $17; July 16, 18 units at $21; and December 7, 23 units at $25. Assume there are 30 units on hand at the end of the period. Nash uses the periodic approach.

Determine the cost of goods sold under FIFO. FIFO Cost of good sold $

Determine the cost of goods sold under LIFO.

		LIFO
Cost of good sold		$

Calculate average unit cost. (Round answer to 2 decimal places, e.g. 5.12.)

Average unit cost

$

Determine the cost of goods sold under average-cost.

		Average-Cost
Cost of good sold		$

Answer 1

Solution

	FIFO
Cost of Goods Sold	$                     822

.

	LIFO
Cost of Goods Sold	$                   1,106

.

Average Cost

$                   19.30

.

	Weighted Average
Cost of Goods Sold	$                 965

.

Working

	Units	Cost per unit	value
Beginning Balance	12	$                   11.00	$ 132
Purchases
	27	$                   17.00	$ 459
	18	$                   21.00	$ 378
	23	$                   25.00	$ 575
Total	80		$ 1,544

.

Average Cost of Inventory
Units	(A)	80
Total Cost	(B)	$ 1,544
Average Cost	(C=B/A)	$                   19.30

.

FIFO
Total Units Available for sale		80
Units Sold		50
Closing Stock in Units		30
Valuation
Ending Inventory	23	@	$             25.00	$ 575
	7	@	$             21.00	$ 147
Value Of Ending Inventory				$ 722
Cost of Goods sold				$ 822
LIFO
Total Units Available for sale		80
Units Sold		50
Closing Stock in Units		30
Valuation
Ending Inventory	12	@	$             11.00	$ 132
	18	@	$             17.00	$ 306
Value Of Ending Inventory				$                  438
Cost of Goods sold	1544 minus 438			$              1,106
Weighted Average method
Total Units Available for sale		80
Units Sold		50
Closing Stock in Units		30
Valuation
Ending Inventory	30	@	$             19.30	$                  579
Value Of Ending Inventory				$                  579
Cost of Goods sold	(Total Purchase and opening stock Minus Closing Stock)			$                  965