Question

# Periodic inventory by three methods; cost of goods sold The units of an item available for...

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

 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