Question

Assume that

Wake Up

Coffee Shop completed the following periodic inventory transactions for a line of merchandise inventory

Jun.	1	Beginning merchandise inventory	20	units @	$19	each
	12	Purchase	9	units @	$20	each
	20	Sale	14	units @	$40	each
	24	Purchase	18	units @	$21	each
	29	Sale	19	units @	$40	each

Requirements

1.	Compute ending merchandise inventory, cost of goods sold, and gross profit using the FIFO inventory costing method.
2.	Compute ending merchandise inventory, cost of goods sold, and gross profit using the LIFO inventory costing method.
3.	Compute ending merchandise inventory, cost of goods sold, and gross profit using the weighted-average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.)

Requirements 1., 2., and 3. Compute ending merchandise inventory, cost of goods sold, and gross profit using the (1) FIFO inventory costing method, (2) LIFO inventory costing method, and (3) weighted-average inventory costing method. (Round weighted-average cost per unit to the nearest cent and all other amounts to the nearest dollar.)

Begin by determining ending merchandise inventory and cost of goods sold under each of the three methods.

Answer 1

Total units available for sale = 20+9+18 = 47 Units

Cost of goods available for sale = (20*19+9*20+18*21) = 938

Sales unit = 14+19 = 33 Units

Ending inventory unit = 47-33 = 14 Units

1

FIFO
Ending inventory (14*21)	294
Cost of goods sold (938-294)	644
Gross profit (33*40-644)	676

2

LIFO
Ending inventory (14*19)	266
Cost of goods sold (938-266)	672
Gross profit (33*40-672)	648

3

Weighted average
Ending inventory (938/47*14)	279
Cost of goods sold (938-279)	659
Gross profit (33*40-659)	661