Ferris Company began January with 6,000 units of its principal product. The cost of each unit...
Ferris Company began January with 6,000 units of its principal product. The cost of each unit is $8. Merchandise transactions for the month of January are as follows:
Required:
Calculate January's ending inventory and cost of goods sold for the month using each of the following alternatives:
1. FIFO, periodic system
2. LIFO, periodic system
3. FIFO, perpetual system
4. Average cost, periodic system
5. Average cost, perpetual system
Homework Answers
Solution 1:
| Computation of COGS and ending inventory - Periodic FIFO | |||||||||
| Particulars | Cost of goods available for sale | Cost of goods sold | Ending Inventory | ||||||
| Nos of units | Unit Cost | Cost of goods available for sale | Nos of units sold | Unit Cost | Cost of goods sold | Nos of units in ending inventory | Unit Cost | Ending inventory | |
| Beginning inventory | 6000 | $8.00 | $48,000 | 6000 | $8.00 | $48,000.00 | 0 | $8.00 | $0.00 |
| Purchases: | |||||||||
| 10-Jan | 5000 | $9.00 | $45,000 | 3000 | $9.00 | $27,000.00 | 2000 | $9.00 | $18,000.00 |
| 18-Jan | 6000 | $10.00 | $60,000 | 0 | $10.00 | $0.00 | 6000 | $10.00 | $60,000.00 |
| Total | 17000 | $153,000 | 9000 | $75,000.00 | 8000 | $78,000.00 | |||
Solution 2:
| Computation of COGS and ending inventory - Periodic LIFO | |||||||||
| Particulars | Cost of goods available for sale | Cost of goods sold | Ending Inventory | ||||||
| Nos of units | Unit Cost | Cost of goods available for sale | Nos of units sold | Unit Cost | Cost of goods sold | Nos of units in ending inventory | Unit Cost | Ending inventory | |
| Beginning inventory | 6000 | $8.00 | $48,000 | 0 | $8.00 | $0.00 | 6000 | $8.00 | $48,000.00 |
| Purchases: | |||||||||
| 10-Jan | 5000 | $9.00 | $45,000 | 3000 | $9.00 | $27,000.00 | 2000 | $9.00 | $18,000.00 |
| 18-Jan | 6000 | $10.00 | $60,000 | 6000 | $10.00 | $60,000.00 | 0 | $10.00 | $0.00 |
| Total | 17000 | $153,000 | 9000 | $87,000.00 | 8000 | $66,000.00 | |||
Solution 3:
| Computation of ending inventory COGS under FIFO - Perpectual | ||||||||||||
| Date | Beginning Inventory | Purchase | Cost of Goods Sold | Ending Inventory | ||||||||
| Qty | Rate | Amount | Qty | Rate | Amount | Qty | Rate | Amount | Qty | Rate | Amount | |
| 1-Jan | 6000 | $8.00 | $48,000.00 | 0 | $0.00 | $0.00 | 0 | $0.00 | $0.00 | 6000 | $8.00 | $48,000.00 |
| 5-Jan | 6000 | $8.00 | $48,000.00 | 0 | $0.00 | $0.00 | 3000 | $8.00 | $24,000.00 | 3000 | $8.00 | $24,000.00 |
| 10-Jan | 3000 | $8.00 | $24,000.00 | 5000 | $9.00 | $45,000.00 | 0 | $0.00 | $0.00 | 3000 | $8.00 | $24,000.00 |
| 5000 | $9.00 | $45,000.00 | ||||||||||
| 12-Jan | 3000 | $8.00 | $24,000.00 | 0 | $0.00 | $0.00 | 2000 | $8.00 | $16,000.00 | 1000 | $8.00 | $8,000.00 |
| 5000 | $9.00 | $45,000.00 | 5000 | $9.00 | $45,000.00 | |||||||
| 18-Jan | 1000 | $8.00 | $8,000.00 | 6000 | $10.00 | $60,000.00 | 0 | $0.00 | $0.00 | 1000 | $8.00 | $8,000.00 |
| 5000 | $9.00 | $45,000.00 | 5000 | $9.00 | $45,000.00 | |||||||
| 6000 | $10.00 | $60,000.00 | ||||||||||
| 20-Jan | 1000 | $8.00 | $8,000.00 | 0 | $0.00 | $0.00 | 1000 | $8.00 | $8,000.00 | 2000 | $9.00 | $18,000.00 |
| 5000 | $9.00 | $45,000.00 | 3000 | $9.00 | $27,000.00 | 6000 | $10.00 | $60,000.00 | ||||
| 6000 | $10.00 | $60,000.00 | ||||||||||
| Total | 9000 | $75,000.00 | 8000 | $78,000.00 | ||||||||
Solution 4:
| Computation of COGS and ending inventory - Periodic Weighted Average cost method | |||||||||
| Particulars | Cost of goods available for sale | Cost of goods sold - Average cost | Ending Inventory - Average cost | ||||||
| Nos of units | Unit Cost | Cost of goods available for sale | Nos of units sold | Unit Cost | Cost of goods sold | Nos of units in ending inventory | Unit Cost | Ending inventory | |
| Beginning inventory | 6000 | $8.00 | $48,000 | ||||||
| Purchases: | |||||||||
| 10-Jan | 5000 | $9.00 | $45,000 | ||||||
| 18-Jan | 6000 | $10.00 | $60,000 | ||||||
| Total | 17000 | $9.00 | $153,000 | 9000 | $9.00 | $81,000 | 8000 | $9.00 | $72,000 |
Solution 5:
| Computation of ending inventory COGS under Weighted Average Cost - Perpectual | ||||||||||||
| Date | Beginning Inventory | Purchase | Cost of Goods Sold | Ending Inventory | ||||||||
| Qty | Rate | Amount | Qty | Rate | Amount | Qty | Rate | Amount | Qty | Rate | Amount | |
| 1-Jan | 6000 | $8.00 | $48,000.00 | 0 | $0.00 | $0 | 0 | $0.00 | $0 | 6000 | $8.00 | $48,000 |
| 5-Jan | 6000 | $8.00 | $48,000 | 0 | $0.00 | $0 | 3000 | $8.00 | $24,000 | 3000 | $8.00 | 24000 |
| 10-Jan | 3000 | $8.00 | $24,000 | 5000 | $9.00 | $45,000 | 0 | $0.00 | $0 | 8000 | $8.63 | $69,000 |
| 12-Jan | 8000 | $8.63 | $69,000 | 0 | $0.00 | $0 | 2000 | $8.63 | $17,250 | 6000 | $8.63 | $51,750 |
| 18-Jan | 6000 | $8.63 | $51,750 | 6000 | $10.00 | $60,000 | 0 | $0.00 | $0 | 12000 | $9.31 | $111,750 |
| 20-Jan | 12000 | $9.31 | $111,750 | 0 | $0.00 | $0 | 4000 | $9.31 | $37,250 | 8000 | $9.31 | $74,500 |
| Total | 9000 | $78,500 | 8000 | $74,500 | ||||||||
Add Answer to:
Ferris Company began January with 6,000 units of its principal product. The cost of each unit...
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Ferris Company began January with 6,000 units of its principal product. The cost of each unit is $6. Merchandise transactions for the month of January are as follows: Purchases Date of Purchase Units Units Unit Cost* Total Cost Jan. 10 5,000 $ 7 $ 35,000 Jan. 18 6,000 $8 $48,000 11,000 $83,000 * Includes purchase price and cost of freight. Sales Date of Sale Units Jan. 5 3,000 Jan. 12 2,000 Jan. 20 4,000 Total 9,000 8,000 units were on...
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Ferris Company began January with 4,000 units of its principal product. The cost of each unit...
Ferris Company began January with 4,000 units of its principal
product. The cost of each unit is $7. Merchandise transactions for
the month of January are as follows:
Purchases
Date of Purchase
Units
Unit Cost*
Total Cost
Jan. 10
3,000
$
8
$
24,000
Jan. 18
4,000
9
36,000
Totals
7,000
60,000
* Includes purchase price and cost of freight.
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Date of Sale
Units
Jan. 5
2,000
Jan. 12
1,000
Jan. 20
3,000
Total
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5,000 units were on...
Ferris Company began 2018 with 5,000 units of its principal product. The cost of each unit...
Ferris Company began 2018 with 5,000 units of its principal
product. The cost of each unit is $9. Merchandise transactions for
the month of January 2018 are as follows:
Purchases
Date of Purchase
Units
Unit Cost*
Total Cost
Jan. 10
6,000
$
10
$
60,000
Jan. 18
5,000
11
55,000
Totals
11,000
115,000
*Includes purchase price and cost of freight.
Sales
Date of Sale
Units
Jan. 5
3,000
Jan. 12
3,000
Jan. 20
4,000
Total
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6,000 units were on...
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Ferris Company began January with 7,000 units of its principal
product. The cost of each unit is $9. Merchandise transactions for
the month of January are as follows:
Purchases
Date of Purchase
Units
Unit Cost*
Total Cost
Jan. 10
6,000
$
10
$
60,000
Jan. 18
7,000
11
77,000
Totals
13,000
137,000
* Includes purchase price and cost of freight.
Sales
Date of Sale
Units
Jan. 5
3,000
Jan. 12
1,000
Jan. 20
4,000
Total
8,000
12,000 units were on...
Ferris Company began January with 4,000 units of its principal
product. The cost of each unit is $7. Merchandise transactions for
the month of January are as follows:
Purchases
Date of Purchase
Units
Unit Cost*
Total Cost
Jan. 10
3,000
$
8
$
24,000
Jan. 18
4,000
9
36,000
Totals
7,000
60,000
* Includes purchase price and cost of freight.
Sales
Date of Sale
Units
Jan. 5
2,000
Jan. 12
1,000
Jan. 20
3,000
Total
6,000
5,000 units were on...
Ferris Company began 2018 with 5,000 units of its principal
product. The cost of each unit is $9. Merchandise transactions for
the month of January 2018 are as follows:
Purchases
Date of Purchase
Units
Unit Cost*
Total Cost
Jan. 10
6,000
$
10
$
60,000
Jan. 18
5,000
11
55,000
Totals
11,000
115,000
*Includes purchase price and cost of freight.
Sales
Date of Sale
Units
Jan. 5
3,000
Jan. 12
3,000
Jan. 20
4,000
Total
10,000
6,000 units were on...
Ferris Company began January with 7,000 units of its principal
product. The cost of each unit is $9. Merchandise transactions for
the month of January are as follows:
Purchases
Date of Purchase
Units
Unit Cost*
Total Cost
Jan. 10
6,000
$
10
$
60,000
Jan. 18
7,000
11
77,000
Totals
13,000
137,000
* Includes purchase price and cost of freight.
Sales
Date of Sale
Units
Jan. 5
3,000
Jan. 12
1,000
Jan. 20
4,000
Total
8,000
12,000 units were on...
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