Question

Inventory Costing Methods . Periodic Method Fortune Stores uses the periodic inventory system for its merchandise inventory. The April 1 inventory for one of the items in the merchandise inventory consisted of 120 units with a unit cost of $335. Transactions for this item during April were as follows: April 9 Purchased 40 units $355 per unit 14 Sold 80 units @ $560 per unit 23 Purchased 20 units @ $360 per unit 29 Sold 40 units Required a. Calculate the cost of goods sold and the ending inventory cost for the month of April using the weighted average cost method. Do not round until your final answers. Round your final answers to the nearest dollar. b. Calculate the cost of goods sold and the ending inventory cost for the month of April using the first in, first-out method. C. Calculate the cost of goods sold and the ending inventory cost for the month of April using the last in, first out method. a. Weighted Average Ending Inventory S Cost of goods Sold S b. First-in, First-out Ending Inventory Cost of Goods Sold: $ Last-in, first-out: Ending Inventory Cost of Goods Sold: $

Answer 1

a.	Weighted Average
	Ending inventory	$       20,533
	Cost of goods sold	$       41,067
b.	First-in, First-out
	Ending inventory	$       21,400
	Cost of goods sold	$       40,200
c.	Last-in, First-out
	Ending inventory	$       20,100
	Cost of goods sold	$       41,500

Working:

FIFO
	Purchases+Beginning Inv.			Cost of Goods Sold			Balance in Inventory
Date	Units	Unit cost	Total $	Units	Unit cost	Total $	Units	Unit cost	Total $
Apr. 1	120	335	40200	120	335	40200
Apr. 9	40	355	14200				40	355	14200
Apr. 23	20	360	7200				20	360	7200
Total	180		61600	120		40200	60		21400
LIFO
	Purchases+Beginning Inv.			Cost of Goods Sold			Balance in Inventory
Date	Units	Unit cost	Total $	Units	Unit cost	Total $	Units	Unit cost	Total $
Apr. 1	120	335	40200	60	335	20100	60	335	20100
Apr. 9	40	355	14200	40	355	14200
Apr. 23	20	360	7200	20	360	7200
Total	180		61600	120		41500	60		20100

Weighted-average:

Ending inventory = $61600 x 60/180 = $20533

Cost of goods sold = $61600 x 120/180 = $41067