Question

Periodic inventory by three methods; cost of goods sold

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

Jan. 1	Inventory	180	units at $108
Mar. 10	Purchase	224	units at $110
Aug. 30	Purchase	200	units at $116
Dec. 12	Purchase	196	units at $120

There are 208 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the ending inventory cost and the cost of goods sold by three methods.

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

Answer 1

Date		Units	Unit cost	Total
Jan. 1	Inventory	180	108	19440
Mar. 10	Purchase	224	110	24640
Aug. 30	Purchase	200	116	23200
Dec. 12	Purchase	196	120	23520
	Total	800		90800
Average cost = 90800/800= $113.5
First-in, first-out (FIFO):
Ending Inventory	24912	=(196*120)+(12*116)
Cost of Goods Sold	65888	=90800-24912
Last-in, first-out (LIFO):
Ending Inventory	22520	=(180*108)+(28*110)
Cost of Goods Sold	68280	=90800-22520
Weighted average cost:
Ending Inventory	23608	=208*113.5
Cost of Goods Sold	67192	=90800-23608