Question

1) Easton Company uses the periodic inventory system and had the following inventory & sales activity for the month of May 2019:

Date	Activity	Quantity	Unit Price
5/1	Beginning Inventory	120	$10
5/5	Purchase	190	$12
5/15	Purchase	260	$14
5/25	Purchase	270	$16

Sales were 480 units at $20.  Using the FIFO method, determine the dollar value of Cost of Goods Sold for the month of May.

2)Easton Company uses the periodic inventory system and had the following inventory & sales activity for the month of May 2019:

Date	Activity	Quantity	Unit Price
5/1	Beginning Inventory	150	$10
5/5	Purchase	225	$12
5/15	Purchase	220	$14
5/25	Purchase	250	$16

Sales were 540 units at $20.  Using the LIFO method, determine the dollar value of Cost of Goods Sold for the month of May.

Answer 1

Answers

• Question #1

FIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	120	$                10.00	$                        1,200.00	120	$               10.00	$                 1,200.00	0	$                 10.00	$                         -
Purchases:
05-May	190	$                12.00	$                        2,280.00	190	$               12.00	$                 2,280.00	0	$                 12.00	$                         -
15-May	260	$                14.00	$                        3,640.00	170	$               14.00	$                 2,380.00	90	$                 14.00	$            1,260.00
25-May	270	$                16.00	$                        4,320.00	0	$               16.00	$                              -	270	$                 16.00	$            4,320.00
TOTAL	840		$                      11,440.00	480		$                 5,860.00	360		$            5,580.00

Cost of Goods Sold = $ 5860

• Question #2

LIFO	Cost of Goods available for sale			Cost of Goods Sold			Ending Inventory
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS	Units	Cost/unit	Ending inventory
Beginning Inventory	150	$                10.00	$                        1,500.00	0	$               10.00	$                              -	150	$                 10.00	$            1,500.00
Purchases:
05-May	225	$                12.00	$                        2,700.00	70	$               12.00	$                     840.00	155	$                 12.00	$            1,860.00
15-May	220	$                14.00	$                        3,080.00	220	$               14.00	$                 3,080.00	0	$                 14.00	$                         -
25-May	250	$                16.00	$                        4,000.00	250	$               16.00	$                 4,000.00	0	$                 16.00	$                         -
TOTAL	845		$                      11,280.00	540		$                 7,920.00	305		$            3,360.00

Cost of Goods Sold = $ 7920