Question

Inventory Costing Methods Carrington Inc. reported the following information for the month of February: February 1 Inventory 59 units @ $18 February 7 54 units @ $19 Purchase February 18 Purchase 60 units @ $21 February 27 Purchase 39 units @ $22 During February, Carrington sold 137 units. The company uses a periodic inventory system. Required: What is the value of ending inventory and cost of goods sold for February under the following assumptions. Assumption Cost of Goods Sold Ending Inventory Of the 137 units sold, 50 cost $18, 38 cost $19, 45 cost $21, and 4 cost $22. $4 2. FIFO 24 3. LIFO %24 24 4. Weighted average method (Round average unit cost to the nearest cent, and round all other calculations and your final answers to the nearest dollar.) %24

Answer 1

Solution

		Cost of goods sold	Ending inventory
1)	Specific Identification	$               2,655.00	$            1,551.00
2)	FIFO	$               2,592.00	$            1,614.00
3)	LIFO	$               2,840.00	$            1,366.00
4)	Weighted average	$               2,718.00	$            1,488.00

Working

	Units available	Sold	Ending Units	Cost per unit	Ending Inventory
Beginning	59	50	9	$                     18.00	$                162.00
Feb 7 purchase	54	38	16	$                     19.00	$                304.00
Feb 18 purchase	60	45	15	$                     21.00	$                315.00
Feb 28 purchase	39	4	35	$                     22.00	$                770.00
Total					$            1,551.00

.

	Units	Cost per unit	value
Beginning Balance	59	$                   18.00	$ 1,062
Purchases
	54	$                   19.00	$ 1,026
	60	$                   21.00	$ 1,260
	39	$                   22.00	$ 858
Total	212		$ 4,206

.

Average Cost of Inventory
Units	(A)	212
Total Cost	(B)	$ 4,206
Average Cost	(C=B/A)	$                   19.84

.

FIFO
Total Units Available for sale		212
Units Sold		137
Closing Stock in Units		75
Valuation
Ending Inventory	39	@	$             22.00	$ 858
	36	@	$             21.00	$ 756
Value Of Ending Inventory				$ 1,614
Cost of Goods sold				$ 2,592
LIFO
Total Units Available for sale		212
Units Sold		137
Closing Stock in Units		75
Valuation
Ending Inventory	59	@	$             18.00	$ 1,062
	16	@	$             19.00	$ 304
Value Of Ending Inventory				$              1,366
Cost of Goods sold	4206 minus 1366			$              2,840
Weighted Average method
Total Units Available for sale		212
Units Sold		137
Closing Stock in Units		75
Valuation
Ending Inventory	75	@	$             19.84	$              1,488
Value Of Ending Inventory				$              1,488
Cost of Goods sold	(Total Purchase and opening stock Minus Closing Stock)			$              2,718