Question

Kirtland Corporation uses a periodic inventory system. At the end of the annual accounting period, December records for the most popular item in inventory showed the following: the accounting Units 360 Unit Cost $5.00 Transactions Beginning inventory, January 1 Transactions during the year: a. Purchase, January 30 b. Purchase, May 1 c. Sale ($7 each) d. Sale ($7 each) 3.00 6.00 260 420 (120) (660) Required: a. Compute the amount of goods available for sale. b.& c. Compute the amount of ending inventory and cost of goods sold at December 31, under Average cost, First in, first-out, Last-in first-out and Specific identification inventory costing methods. For Specific identification, assume that the first sale was selected two- fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the second sale was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1. Complete this question by entering your answers in the tabs below. Req A Req B and C Compute the amount of goods available for sale. Goods available for sale Reg Band )

Answer 1

answer a) 5100 cost of goods available for sale answer specific B&C ending inventory Cost of goods sold average cost 1275 3825 FIFO 1560 3540 LIFO 1300 3800 identification 996 4104

explanation

FIFO periodic inventory ending inventory units unit price total beginning inventory jan1 Jan-30 May-01 total cost of goods available for sale units unit price 360 5 260 420 total 1800 780 2520 5100 cost of goods sold units unit price 360 5 260 3 160 780 total 1800 780 960 3540 6 260 260 1560 1560 1040 LIFO periodic inventory cost of goods available for sale units unit price 360 260 cost of goods sold units unit price 100 5 260 ending inventory units unit price 260 5 total 1300 total 1800 780 2520 5100 beginning inventory jan1 Jan-30 May-01 total 500 780 2520 3800 420 420 6 total 1040 780 260 1300

AVERAGE cost periodic inventory cost of goods available for sale units unit price beginning inventory jan1 360 Jan-30 260 May-01 420 total 1040 cost of goods sold units unit price 780 4.90385 total 3825 ending inventory units unit price 2 60 4.90385 total 1275 total 1800 780 2520 5100 avg cost=5100/1040= 4.90385 260 780 1275 Specific identification ending inventory units unit price cost of goods available for sale units unit price 360 260 cost of goods sold units unit price | 48 | total total 1800 780 beginning inventory jan1 Jan-30 72 188 564 total 240 216 1560 2088 4104 May-01 total 420 1040 2520 5100 312 348 780 72 260 432 996