Question

Exercise 2. Date Activities Units Acquired at Cost Units Sold at Retail Dec. 01 Beginning inventory 5 units @ $3.00 = $15.00 Dec. 08 Purchase 10 units @ $4.50 - $45.00 Dec. 09 Sales 8 units @ $7.00 Dec. 19 Purchase 13 units @ $5.00 = $65.00 Dec. 24 Sales 18 units @ $8.00 Dec. 30 Purchase 8 units @ $5.30 = $42.40 36 units $167.40 26 units Required: Use FIFO and LIFO and Weighted Average Methods to calculate the below for the Inventory 1. The cost of goods sold 2. Ending balance of the Inventory at the End of the Month

Answer 1

1 & 2		Cost of Goods Sold	Ending Inventory
a	Average cost	$120.90	$46.50
b	FIFO	$115.00	$52.40
c	LIFO	$129.90	$37.50
	Weighted average
	Units	Unit Cost
	5	$3.00	$15.00
	10	$4.50	$45.00
	13	$5.00	$65.00
	8	$5.30	$42.40
	36		$167.40
	Weighted average cost per unit		$4.65
	Ending Inventory = 10 x $4.65	$46.50
	COGS = Beginning inventory + purchases - ending inventory
	=	$15.00 + $152.40 - $46.50
	=	$120.90
	FIFO
	Units	Unit Cost
	2	$5.00	$10.00
	8	$5.30	$42.40
		Ending Inventory	$52.40
	COGS = Beginning inventory + purchases - ending inventory
	=	$15.00 + $152.40 - $52.40
	=	$115.00
	LIFO
	Units	Unit Cost
	5	$3.00	$15.00
	5	$4.50	$22.50
		Ending Inventory	$37.50
	COGS = Beginning inventory + purchases - ending inventory
	=	$15.00 + $152.40 - $52.40
	=	$129.90
	Note: Assuming Period Inventory system are followed