Question

Mitchell Company’s record of transactions for the month of June was as follows. Purchases: Date                 Units         &nbs

Mitchell Company’s record of transactions for the month of June was as follows.

Purchases:
Date                 Units               Unit Cost
June 1              600       @         3.00€
4                        1,500    @         3.04
8                        800       @         3.20
13                     1,200     @        3.25
21                     700        @        3.30
29                     500        @        3.13
                         -------
                         5,300

Sales:
Date              Units                Unit Cost
June 3           500       @          5.00€
9                    1,300     @          5.00
11                  600        @          5.50
23                  1,200     @          5.50
27                  900        @          6.00
                     ----------
                      4,500


Instructions

(a) Assuming that periodic inventory records are kept, compute the cost of goods sold and ending inventory at June 30 using (1) FIFO and (2) average cost.

Explain your answer

a) Periodic Inventory system

FIFO:

Cost of goods sold    //       Ending Inventory














Average cost:

Cost of Goods sold      //     Ending inventory


















(b) Assuming that perpetual inventory records are kept in both units and dollars, determine the Cost of goods sold and ending inventory at June 30 using (1) FIFO and (2) moving average cost.

Explain your answer

b) Perpetual Inventory system

FIFO method:

Cost of goods sold    //    Ending Inventory



Average cost:

Cost of goods sold    //    Ending inventory

Homework Answers

Answer #1

1

FIFO Periodic
Computation of COGS

COGS = OPENING STOCK + PURCHASE - CLOSING STOCK

0 + 16695 - 2555 = 14140

QTY UNIT PRICE TOTAL
600 3 1800
1500 3.04 4560
800 3.2 2560
1200 3.25 3900
700 3.3 2310
500 3.13 1565
TOTAL PURCHASE COST 16695

COMPUTATION OF ENDING INVENTORY

TOTAL UNITS PURCHASED - TOTAL UNITS SOLD

5300 - 4500 = 800

COST OF ENDING INVENTORY

500 * 3.13 = 1565

300 * 3.3 = 990

TOTAL COST OF ENDING INVENTORY = 2555

AVERAGE COST

TOTAL COST OF ENDING INVENTORY

TOTAL COST OF PURCHASE / NUMBER UNITS PURCHASED

16695 / 5300 = 3.15

COST OF ENDING INVENTORY = 800 * 3.15

= 2520

COGS = 16695 - 2520

= 14175

2,

PERPECTUAL METHOD

For FIFO, the periodic and perpetual methods yield the same answers. The answers to the FIFO perpetual
method are the same as the answers to the FIFO periodic method

COGS = 14140

ENDING INVENTORY = 2555

MOVING AVERAGE METHOD

For the moving average method, after each purchase it is necessary to calculate a new average cost per
unit.

COGS

QTY AVERAGE COST DURING SALE TOTAL
500 3 1500
1300 3.09 4017
600 3.09 1854
1200 3.23 3876
900 3.23 2907
TOTAL 14154

ENDING INVENTORY

Calculation average cost for ending inventory

500 * 3.13 = 1565

300 * 3.23 = 969

1565 + 969 = 2534

average cost = 2534/800

= 3.16

Ending inventory = 800 * 3.16

= 2528

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Transactions for the month of June were: Purchases Sales June 1 (balance) 800 at 3.20 June...
Transactions for the month of June were: Purchases Sales June 1 (balance) 800 at 3.20 June 2 ….600 at $5.50 3…………………….2,200 at 3.10 6………..1,600 at 5.50 7…………………….1,200 at 3.30 9…………1,000 at 5.50 15…………………..1,800 at 3.40 10……….. 400 at 6.00 22……………………..500 at 3.50 18………..1.400 at 6.00 ………………………………………………… 25…………..200 at 6.00 Assuming that periodic inventory system is adopted, the ending inventory on a LIFO basic is?
Transactions for the month of June were: Purchases Sales June 1 (balance) 800 at 3.20 June...
Transactions for the month of June were: Purchases Sales June 1 (balance) 800 at 3.20 June 2 ….600 at $5.50 3…………………….2,200 at 3.10 6………..1,600 at 5.50 7…………………….1,200 at 3.30 9…………1,000 at 5.50 15…………………..1,800 at 3.40 10……….. 400 at 6.00 22……………………..500 at 3.50 18………..1.400 at 6.00 ………………………………………………… 25…………..200 at 6.00 Assuming that perpetual inventory system is adopted, the ending inventory on a LIFO basis?
Buffalo Industries reports the following for the month of June. Date Explanation Units Unit Cost Total...
Buffalo Industries reports the following for the month of June. Date Explanation Units Unit Cost Total Cost June 1 Inventory 131 $5 $655 12 Purchases 359 6 2,154 23 Purchases 195 7 1,365 30 Inventory 267 A sale of 371 units occurred on June 15 for a selling price of $8 and a sale of 47 units on June 27 for $9. Calculate the average cost per unit, using a perpetual inventory system. (Round answers to 3 decimal places, e.g....
Spotter Corporation reported the following for June in its periodic inventory records. Date Description Units Unit...
Spotter Corporation reported the following for June in its periodic inventory records. Date Description Units Unit Cost Total Cost June 1 Beginning 30 $ 11.00 $ 330.00 11 Purchase 35 12.00 420.00 24 Purchase 35 14.00 490.00 30 Ending 39 Required: Calculate the cost of ending inventory and the cost of goods sold under the (a) FIFO, (b) LIFO, and (c) weighted average cost methods.
Assume that Martinez Company has the following transactions in its first month of operations. Date Purchases...
Assume that Martinez Company has the following transactions in its first month of operations. Date Purchases Sold Balance Feb. 1 2,100 @ $3.60 2,100 units Feb. 10 6,200 @ $3.95 8,300 units Feb. 21 4,400 units 3,900 units Feb. 28 2,100 @ $4.30 6,000 units Martinez uses a perpetual inventory system. (a) Compute cost of goods sold and ending inventory at February 28, assuming Martinez uses the FIFO cost flow assumption. Cost of goods sold $ Ending inventory $
Concord Company uses a periodic system reports the following for the month of June. Units Unit...
Concord Company uses a periodic system reports the following for the month of June. Units Unit Cost Total Cost June 1 Inventory 200 $5 $ 1,000 12 Purchase 450 6 2,700 23 Purchase 320 7 2,240 30 Inventory 120 Compute the cost of the ending inventory and the cost of goods sold under FIFO and LIFO. FIFO LIFO Cost of the ending inventory $ $ Cost of goods sold
Exercise 6-7 Cheyenne Corp. reports the following for the month of June. Date Explanation Units Unit...
Exercise 6-7 Cheyenne Corp. reports the following for the month of June. Date Explanation Units Unit Cost Total Cost June 1 Inventory 123 $5 $ 615 12 Purchases 351 6 2,106 23 Purchases 194 7 1,358 30 Inventory 207 Calculate weighted-average unit cost. (Round answer to 3 decimal places, e.g. 5.125.) Weighted-average unit cost $ Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (Round answers to 0 decimal places, e.g....
A record of transactions for the month of May was as follows: Purchases Sales May 1...
A record of transactions for the month of May was as follows: Purchases Sales May 1 (balance) 470 @ $5.20 May 3 235 @ $7.00 4 1,400 @ $5.10 6 1,050 @ 7.00 8 880 @ $5.30 12 980 @ 7.50 14 780 @ $5.40 18 410 @ 7.50 22 1,300 @ $5.50 25 1,400 @ 8.00 29 500 @ $5.55 Assuming that perpetual inventory records are kept in dollars, determine the ending inventory using LIFO.
Hemming Co. reported the following current-year purchases and sales for its only product. Date Activities Units...
Hemming Co. reported the following current-year purchases and sales for its only product. Date Activities Units Acquired at Cost Units Sold at Retail Jan. 1 Beginning inventory 300 units @ $14.00 = $ 4,200 Jan. 10 Sales 250 units @ $44.00 Mar. 14 Purchase 520 units @ $19.00 = 9,880 Mar. 15 Sales 460 units @ $44.00 July 30 Purchase 500 units @ $24.00 = 12,000 Oct. 5 Sales 480 units @ $44.00 Oct. 26 Purchase 200 units @ $29.00...
Cheyenne Corp. uses a periodic inventory system and reports the following for the month of June....
Cheyenne Corp. uses a periodic inventory system and reports the following for the month of June. Date Explanation Units Unit Cost Total Cost June 1 Inventory 130 $5 $ 650 12 Purchases 370 6 2,220 23 Purchases 200 7 1,400 30 Inventory 240 Calculate weighted-average unit cost. (Round answer to 3 decimal places, e.g. 5.125.) Compute the cost of the ending inventory and the cost of goods sold under FIFO, LIFO, and average-cost. (Round answers to 0 decimal places, e.g....