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Periodic Inventory by Three Methods; Cost of Merchandise Sold The units of an item available for...

Periodic Inventory by Three Methods; Cost of Merchandise Sold

The units of an item available for sale during the year were as follows:

Jan. 1 Inventory 50 units @ $110
Mar. 10 Purchase 60 units @ $120
Aug. 30 Purchase 20 units @ $124
Dec. 12 Purchase 70 units @ $130

There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.

Cost of Merchandise Inventory and Cost of Merchandise Sold
Inventory Method Merchandise Inventory Merchandise Sold
First-in, first-out (FIFO) $ $
Last-in, first-out (LIFO)
Weighted average cost

Homework Answers

Answer #1
Units Unit cost Total cost
Jan. 1 50 110 5500
Mar. 10 60 120 7200
Aug. 30 20 124 2480
Dec. 12 70 130 9100
Total 200 24280
Average cost per unit 121.4 =24280/200
First-in, first-out (FIFO):
Merchandise Inventory 10340 =(70*130)+(80-70)*124
Merchandise Sold 13940 =24280-10340
Last-in, first-out (LIFO):
Merchandise Inventory 9100 =(50*110)+(80-50)*120
Merchandise Sold 15180 =24280-9100
Weighted average cost :
Merchandise Inventory 9712 =80*121.4
Merchandise Sold 14568 =24280-9712
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