Question

Gladstone Company 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. Assume its accounting records provided the following information at the end of the annual accounting period, December 31 Unit Cost $ 55 Transactions Units Beginning inventory, January 1.400 Transactions during the year: a. Purchase, January 30 2,450 b. Sale, March 14 ($100 each) (1,050) C. Purchase, May 1 1,150 Sale, August 31 ($100 each) (1,500) 65 85 Assuming that for Specific identification method (item 1d) the March 14 sale was selected two fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1 Required: 1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)

Answer 1

	Amt of goods available for sale	Ending Inventory	Cost of goods sold
LIFO	$334,000	$145,250	$188,750
Weighted average	$334,000	163,660	170,340
FIFO	$334,000	189,250	151,750
Specific	334,000	171,850	162,150

calculation of cost of goods to available for sale - (1400x $55) + (2450 x $65) + (1,150 $85) = $334,000 cost of goods available for sale is common in all. inventory system methods: & calculation of Ending inventory units : oral units available for sale (-) units sold. 5000 - 2550 21450 a) Last in first out: Ending inventory (1400x 855) + (1,050 x $65) $145, 250 cost of goods sold (Celso x 855)+(1.400x$65)] = $ 188, 750 blea weighted average cost Aug cost per unit cost of goods available for sale nou of units $334,000 66 80 5000 - $66.80 Ending inventory cost of goods sold 2,450 units x $66.50 $ 163,660 2,550 units X $66.80 = $170,340 c) first in first out Ending inventory cost of goods sold ( 1,500x $55) + (950x865) = $ 189,250 (1400x855) + (1,150x$65) = $151,750

d) specific Identification method cost of goods sold Date per unit mar 14. $ 55 Mar 14. 630 Total units 420 $23,100 40,950 Aug 31. $55 53,900 980 (1400-420) $85 (1500-980) cost of goods sold - Aug 31 520 44,200 162, 150 Ending Inventory cost of goods. 3016 cost of goods available for sale -) $ 334,000 - 162,150 18171,850

If you have any doubts please comment on the answer