Question

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

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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.)

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.