Question

Question a :-

Periodic inventory system is the system wherein the amount reflecting in the Inventory account is not updated when purchases of materials are made from suppliers, but, the Inventory account is commonly updated only once (ideally at the end of the Period).

Therefore the Cost of goods available for sales in Units and Dollar is as Under:-

 Date Quantity (Tins) Rate per Unit (Tin) Total Value May 1 (Opening stock) 10 \$7.00 \$70.00 May 5th 15 \$8.00 \$120.00 May 15th 10 \$10.00 \$100.00 May 25th 20 \$11.00 \$220.00 Total 55 \$9.27 \$510.00 Closing Stock (Given) 15 \$9.27 (\$139.09 / 15 Tins) \$139.09

Question b :-

 Date Quantity (Tin ) Rate per Unit (Tin) Total Value May 1 (Opening stock) 10 \$7.00 \$70.00 May 5th 15 \$8.00 \$120.00 May 15th 10 \$10.00 \$100.00 May 25th 20 \$11.00 \$220.00 Total 55 Sales 40 15 Tins purchased on 25th May left as per the FIFO Method of Inventory system, because all the items are sold on first in first out basis Cost of Goods Sold = \$70 + \$120 + \$100 + \$55 = \$ 345 Closing Stock (Given) 15 \$11.00 \$165.00

Thanks and Regards

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