Question

Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December 31, the accounting records for the most popular item in inventory showed the following: Units 320 Unit Cost $5.00 Transactions Beginning inventory, January 1 Transactions during the year: a. Purchase, January 30 b. Purchase, May 1 c. Sale ($7 each) d. Sale ($7 each) 2.60 6.00 220 380 (80) (620) Required: a. Compute the amount of goods available for sale. b. &c. Compute the amount of ending inventory and cost of goods sold at December 31, under Average cost, First-in, first-out, Last-in, first-out and Specific identification inventory costing methods. For Specific identification, assume that the first sale was selected two- fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the second sale was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1. Complete this question by entering your answers in the tabs below. Req A Reg B and C Compute the amount of ending inventory and cost of goods sold at December 31 under Average cost, First-in, first-out, Last- in, first-out. Specific identification of the inventory costing methods. For Specific identification, assume that the first sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the second sale was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Show less A Average Costi et First-In, First- Out Last-In, First- Specific Identification Ending inventory Cost of goods sold < Req A Req B and C )

Answer 1

Goods available for sale is equal to beginning inventory + purchases made during the year
	Units	Unit Cost	Amount
Beginning Inventory	320	5	1,600
Jan 30 Purchase	220	3	572
May 1 Purchase	380	6	2,280
Goods available for sale	920		4,452
Average cost method takes average cost into account for the purpose of calculation
FIFO method assumes that goods purchased first are sold first
LIFO method assumes that goods purchased later are sold first
Units in ending inventory = 920-700 = 220 units
	Average cost	FIFO	LIFO	Specific Identification
Ending Inventory	1064.608696	1,320	1,100	735.20
Cost of Goods sold	3,387.39	3,132	3,352	3,716.80

B C D 1 Goods available for sale is equal to beginning inventory + purchases made during the year 2 Units Unit Cost Amount 3205 =B3*C3 220 2.6 =B4*C4 380 =B5*C5 =SUM(B3:B5) =SUM(D3:05) 3 Beginning Inventory 4 Jan 30 Purchase 5 May 1 Purchase 6 Goods available for sale 7 8 Average cost method takes average cost into account for the purpose of calculation 9 FIFO method assumes that goods purchased first are sold first 10 LIFO method assumes that goods purchased later are sold first 11 Units in ending inventory = 920-700 = 220 units 12 13 Ending Inventory 14 Cost of Goods sold 15 Average cost FIFO LIFO =D6*220/B6 =220*C5 1=220*C3 =700*D6/920 =D6-C13 =D6-D13 Specific Identification =D6-E14 =(32*C3+48*C4+288*C3+332*C5)