Question

M7-7 Calculating Cost of Goods Available for Sale, Cost of Goods Sold, and Ending Inventory under FIFO, LIFO, and Weighted Average Cost (Periodic Inventory) [LO 7-3] Aircard Corporation tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period as if it uses a periodic inventory system. The following are the transactions for the month of July. Units Unit Cost July 1 Beginning Inventory 2,500 $ 50 July 5 Sold 1,500 July 13 Purchased 6,500 54 July 17 Sold 3,500 July 25 Purchased 8,500 56 July 27 Sold 5,500 Calculate the cost of goods available for sale, ending inventory, and cost of goods sold if Aircard uses (a) FIFO, (b) LIFO, or (c) weighted average cost. (Round "Cost per Unit" to 2 decimal places.)

Answer 1

	Units	Unit cost	Total
Beginning inventory	2500	50	125000
July 13 Purchase	6500	54	351000
July 25 Purchase	8500	56	476000
Total	17500		952000
Average cost = 952000/17500 = $54.4
Ending inventory units = 17500-1500-3500-5500= 7000
a
FIFO:
Cost of goods available for sale	952000
Ending inventory	392000	=7000*56
Cost of goods sold	560000	=952000-392000
b
LIFO:
Cost of goods available for sale	952000
Ending inventory	368000	=(2500*50)+(4500*54)
Cost of goods sold	584000	=952000-368000
c
Weighted average cost:
Cost of goods available for sale	952000
Ending inventory	380800	=7000*54.4
Cost of goods sold	571200	=952000-380800