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Item 7

Item 7 Part 2 of 4 1 points

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Problem 8-5 (Algo) Various inventory costing methods [LO8-1, 8-4]

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Ferris Company began January with 8,000 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	5,000		$	10			$	50,000
Jan. 18	8,000			11				88,000
Totals	13,000							138,000

* 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

11,000 units were on hand at the end of the month.

Problem 8-5 (Algo) Part 2

2. Calculate January's ending inventory and cost of goods sold for the month using LIFO, periodic system.
  

LIFO	Cost of Goods Available for Sale			Cost of Goods Sold - Periodic LIFO			Ending Inventory - Periodic LIFO
	# of units	Cost per unit	Cost of Goods Available for Sale	# of units sold	Cost per unit	Cost of Goods Sold	# of units in ending inventory	Cost per unit	Ending Inventory
Beginning Inventory	8,000	$9.00	$72,000	8,000	$9.00	$72,000	8,000	$9.00	$72,000
Purchases:
January 10	5,000	$10.00	50,000	3,000	$10.00	30,000	5,000	$10.00	50,000
January 18	8,000	$11.00	88,000	0	$11.00	0	8,000	$11.00	88,000
Total	21,000		$210,000	11,000		$102,000	21,000		$210,000

Answer 1