Question

One of the products sold by American Supply Company is a one inch brass pipe. The company purchases these pipes several times during the year and sells the item daily. Listed below is the relevant inventory information. Number Cost Total of per Units Unit Cost Inventory, January 1 March 1 purchase. June 1 purchase.. September 15 purchase. December 16 purchase.. Goods available for sale Units sold during the year Inventory, December 31 Instructions: 4,000 5,150 6,200 4,800 4,850 25,000 19.000 6,000 S 5.89 $ 23,560 6.20 31,930 6.60 40,920 6.80 32,640 7.00 33.950 163,000 In the worksheet provided, compute the cost of the ending inventory and cost of goods sold under the following inventory assumptions: a. b. c. First-in, first out (FIFO) Last-in, first-out (LIFO) Average Cost

Answer 1

Periodical Inventory
Inventory Using FIFO
Details	Unit	Rate		Inventory Cost $
Opening Balance on Jan 1	4000	$                       5.89		$   23,560.00
Purchases
March 1 purchase	5150	$                       6.20		$   31,930.00
Jun 1 Purchase	6200	$                       6.60		$   40,920.00
Sep 15 Purchase	4800	$                       6.80		$   32,640.00
Dec 16 purchase	4850	$                       7.00		$   33,950.00
Total Goods available for sale	25000			$ 163,000.00
Less Units Sold during the year	19000
Inventory Dec 31	6000
Sales Details by FIFO
Sales of Opening stock	4000	$                       5.89		$   23,560.00
sales of Mar 1 purchased units	5150	$                       6.20		$   31,930.00
sales of Jun 1 Purchased units	6200	$                       6.60		$   40,920.00
sales of Sep 15 Purchased units	3650	$                       6.80		$   24,820.00
Total Sales	19000			$ 121,230.00
closing Stock	6000			$   41,770.00
Ans 1. cost of Ending Inventory on Dec 31 is =		$             41,770.00
Cost of Goods Sold =		$           121,230.00

Periodical Inventory
Inventory Using LIFO
Details	Unit	Rate		Inventory Cost $
Opening Balance on Jan 1	4000	$                       5.89		$   23,560.00
Purchases
March 1 purchase	5150	$                       6.20		$   31,930.00
Jun 1 Purchase	6200	$                       6.60		$   40,920.00
Sep 15 Purchase	4800	$                       6.80		$   32,640.00
Dec 16 purchase	4850	$                       7.00		$   33,950.00
Total Goods available for sale	25000			$ 163,000.00
Less Units Sold during the year	19000
Inventory Dec 31	6000
Sales Details by FIFO
Sales of Dec 16 purchase	4850	$                       7.00		$   33,950.00
sales of Sep 15 Purchased units	4800	$                       6.80		$   32,640.00
sales of Jun 1 Purchased units	6200	$                       6.60		$   40,920.00
sales of March 1 Purchased units	3150	$                       6.20		$   19,530.00
Total Sales	19000			$ 127,040.00
closing Stock	6000			$   35,960.00
Ans 1. cost of Ending Inventory on Dec 31 is =		$             35,960.00
Cost of Goods Sold =		$           127,040.00

Periodical Inventory
Inventory Using Average cost
Details	Unit	Rate		Inventory Cost $
Opening Balance on Jan 1	4000	$                       5.89		$   23,560.00
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