Question

Problem 6-1A Calculate ending inventory and cost of goods sold for four inventory methods (LO6-3) [The...

Problem 6-1A Calculate ending inventory and cost of goods sold for four inventory methods (LO6-3)

[The following information applies to the questions displayed below.]

Sandra’s Purse Boutique has the following transactions related to its top-selling Gucci purse for the month of October. Sandra's Purse Boutique uses a periodic inventory system.

Date Transactions Units Unit Cost Total Cost
October 1 Beginning inventory 6 $ 880 $ 5,280
October 4 Sale 4
October 10 Purchase 5 890 4,450
October 13 Sale 3
October 20 Purchase 4 900 3,600
October 28 Sale 7
October 30 Purchase 8 910 7,280
$ 20,610

1. Calculate ending inventory and cost of goods sold at October 31, using the specific identification method. The October 4 sale consists of purses from beginning inventory, the October 13 sale consists of one purse from beginning inventory and two purses from the October 10 purchase, and the October 28 sale consists of three purses from the October 10 purchase and four purses from the October 20 purchase.

2. Using FIFO, calculate ending inventory and cost of goods sold at October 31.

4. Using weighted-average cost, calculate ending inventory and cost of goods sold at October 31. (Round your intermediate and final answers to 2 decimal places.)

Homework Answers

Answer #1

Correct Answer:

Specific identification

FIFO

Weighted Average

Cost of Goods Sold

$    12,450.00

$ 12,430

$ 12,545

Ending Inventory

$       8,160.00

$ 8,180

$ 8,065

Working:

Cost of Goods Available for sale

Units

Cost per unit

value

Beginning Inventory

6

$                      880.00

$                   5,280.00

Purchases

10-Oct

5

$                      890.00

$                   4,450.00

20-Oct

4

$                      900.00

$                   3,600.00

30-Oct

8

$                      910.00

$                   7,280.00

Total

23

$                 20,610.00

Specific Identifications

Date

Goods Available for sale

Cost of Goods Sold

Ending Inventory Balance

# of Units

Cost Per Unit

Cost of Goods Available for sale

# of Units Sold

Cost per Unit

Cost of Goods Sold

# of Units

Cost per Unit

Inventory Balance

Beginning Inventory

6

$ 880.00

$         5,280.00

5

$ 880.00

$      4,400.00

1

$ 880.00

$          880.00

Purchases

10-Oct

5

$ 890.00

$         4,450.00

5

$ 890.00

$      4,450.00

0

$ 890.00

$                    -  

20-Oct

4

$ 900.00

$         3,600.00

4

$ 900.00

$      3,600.00

0

$ 900.00

                       -  

30-Oct

8

$ 910.00

$         7,280.00

0

$ 910.00

$                   -  

8

$ 910.00

$       7,280.00

Totals

23

$       20,610.00

14

$    12,450.00

9

$       8,160.00

FIFO

A

Total Units Available for sale

23

$          20,610.00

Units Sold

14

Ending Inventory Units

9

Valuation

Cost of Goods Sold

6

$                       880.00

$            5,280.00

5

$                       890.00

$            4,450.00

3

$                       900.00

$            2,700.00

$                         -  

$                         -  

$                         -  

B

Cost of Goods Sold

14

units

$          12,430.00

A-B

Ending Inventory

9

units

$            8,180.00

Weighted Average Cost Per unit

Units

(A)

23

Total Cost

(B)

$                20,610.00

Average Cost

(C=B/A)

$                      896.09

Weighted Average

A

Total Units Available for sale

23

$          20,610.00

Units Sold

14

Ending Inventory Units

9

Valuation

Cost of Goods Sold

14

$                       896.09

$          12,545.22

$                         -  

B

Cost of Goods Sold

14

units

$          12,545.22

A-B

Ending Inventory

9

units

$            8,064.78

End of answer.

Thanks.

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