Question

1. Calculate January's ending inventory and cost of goods sold for the month using FIFO, periodic system.

Check my work 10 Required information [The following information applies to the questions displayed below. Ferris Company began January with 8,000 units of its principal product. The cost of each unit is $7. Merchandise transactions for the month of January are as follows: Part 1 of 5 Purchases 6.66 points Date of Purchase Units Unit Cost * Total Cost $ 8 Jan. 10 6,000 48,000 72,000 Jan. 18 8,000 02:13:41 Totals 14,000 120,000 *Includes purchase price and cost of freight. еВook Print Sales Units Date of Sale References Jan. 5 4,000 2,000 5,000 Jan. 12 Jan. 20 11,000 Total 11,000 units were on hand at the end of the month

2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.

3. Calculate January's ending inventory and cost of goods sold for the month using FIFO, perpetual system.

4. Calculate January's ending inventory and cost of goods sold for the month using Average cost, periodic system

5. Calculate January's ending inventory and cost of goods sold for the month using Average cost, perpetual system. (Round average cost per unit to 4 decimal places. Enter sales with a negative sign.)
  

Answer 1

Ans 1: First in, first out method (FIFO): In this method it is assumed that inventory which is purchased first will be sold first and the inventory will consist of recent purchases. Periodic inventory System: In this system, the cost of sales and inventory are determined as the end of the accounting period. Cost of Good Sold Periodic FIFO Ending inventory -Periodic FIFO FIFO Cost of Goods Available for Sale No of Cost Per Cost of Goods Available for Unit Sale 8000 $7 $56,000 No of Unit Cost Per Unit Cost of Good Sold No of Unit Cost Per Unit Ending inventory Unit 8000 $7 $56,000 $7 $0 3000 $8 $24,000 Beginning Purchases : Jan'10 Jan'18 Total Ending Inventory Cost of Good Sold 6000 8000 22000 $96,000 $80,000 $48,000 $72,000 $1,76,000 3000 8000 11000 $24,000 $72,000 $96,000 11000 $80,000 Ans 2: Last in, first out method (LIFO): In this method it is assumed that inventory which is purchased last will be sold first and the inventory will consist of old purchases. Periodic inventory System: In this system, the cost of sales and inventory are determined as the end of the accounting period. Cost of Goods Available for Sale Cost of Good Sold Periodic LIFO Ending inventory -Periodic LIFO LIFO | No of Unit Cost Per Unit No of Unit Cost of Goods Available for Sale $56,000 Cost Per Unit Cost of Good Sold No of Unit Cost Per Unit Ending inventory 8000 $7 $0 8000 $7 $56,000 Beginning Purchases : Jan'10 Jan'18 3000 6000 8000 22000 $80,000 $96,000 $48,000 $72,000 $1,76,000 3000 8000 11000 $24,000 $72,000 $96,000 $24,000 $0 $80,000 Total 11000 Ending Inventory Cost of Good Sold

Ending inventory -Perpetual FIFO No of Unit Cost Per Unit Ending inventory Ans 3: Perpetual inventory System: In this system, the cost of sales and invenries are updated on every sales and purchase transactions. First in, first out method (FIFO): In this method it is assumed that inventory which is purchased first will be sold first and the inventory will consist of recent purchases. Cost of Goods Available for Sale Cost of Good Sold January 5 Cost of Good Sold January 12 Cost of Good Sold January 20 Perpetual LIFO Cost of Goods No of Cost Per Cost Per Cost of Good Cost Per Cost of Cost Per No of Unit Cost of Available for No of Unit No of Unit Unit Unit Unit Sold Unit Good Sold Unit Good Sold Sale Beginning 8000 $56,000 4000 $7 $28,000 2000 $7 $14,000 2000 $14,000 Purchases : Jan'10 6000 $8 $48,000 $0 3000 $24,000 Jan'18 8000 $9 $72,000 $0 Total 22000 $1,76,000 4000 $28,000 2000 $14,000 5000 $38,000 Ending Inventory $96,000 Cost of Good Sold $80,000 $7 $7 $0 $9 SO 3000 8000 11000 $24,000 $72,000 $96,000 Ans 4: In weighted average cost method per unit purchase is derived by adding cost opening inventory and purchase made during the year and then dividing it by the adding the units of opeinng inventory and units purchased during the year Cost of Goods Available for Sale Cost of Good Sold Periodic Average Ending inventory -Periodic Average Average Cost No of Cost Per Unit No of Unit Cost Per Unit Cost of Goods Available for Sale $56,000 Cost of Good Sold No of Unit Cost Per Unit Unit Ending inventory 8000 $7 | $8 Beginning Purchases : Jan'10 Jan'18 Total Ending Inventory Cost of Good Sold $9 6000 8000 22000 $88,000 $88,000 $48,000 $72,000 $1,76,000 $8 11000 $8 $88,000 11000 $8 $88,000

Ans 5: Perpetual Average Cost Cost of Good Sold Cost Per Cost of Good No of Unit Unit Sold inventory on hand No of Cost Per Ending Unit inventory 8000 $7.0000 $56,000 er Unit 4000 $7.0000 $28,000 4000 6000 10000 $7.0000 $8.0000 $7.6000 $28,000 $48,000 $ 76,000 Beginning Sale January 5 Sutobtal Average Cost Purchase - January 10 Sutobtal Average Cost Sale January 12 Sutobtal Average Cost Purchase - January 18 Subtotal Average Cost Purchase - January 20 Subtotal Average Cost 2000 $7.6000 $15,200 8000 8000 16000 $7.6000 $9.0000 $8.3000 $60,800 $72,000 $1,32,800 5000 $8.3000 $41,500 11000 $8.3000 $91,300 11000 $84,700 Ending Inventory Cost of Good Sold $91,300 $84,700