Answer:
1. 2,100 units and $28,350
2. 1,170 units
3.
Cost of ending inventory Cost of goods sold
a. FIFO $16,590 $11,760
b. LIFO $15,300 $13,050
c. Weighted Average $12,093 $12,492
4.
<u>Income Statement for the year ended December 3</u>1
FIFO LIFO Weighted Average
Sales ($12,600 + $ 26,460) $39,060 $39,060 $39,060
Cost of Goods Sold ($11,760) ($13,050) ( $12,492)
Gross Profit $27,300 $26,010 $26,568
Less Expenses ($18,200) ($18,200) ($18,200)
Net Income / (Loss) $9,100 $7,810 $8,368
5. No Data
6. LIFO
Explanation:
Periodic Method means that inventory valuation is done after a specific period. In this case valuation is being done at year end.
<u>Calculation of the number and cost of goods available for sale</u>
Units Total Costs
Beginning Inventory 300 $4,200
Add Purchases :
April 11 950 $11,400
June 1 850 $12,750
Available for Sale 2,100 $28,350
Ending Inventory units = Units Available for Sale - Units Sold
= 2,100 units - 300 units - 630 units
= 1,170 units
<u>a. FIFO</u>
FIFO stands for First In First Out.
i. Cost of ending inventory
320 units × $12 = $3,840
850 units × $15 = $12,750
Total = $16,590
ii. Cost of goods sold
300 units × $14 = $4,200
630 units × $12 = $7,560
Total = $11,760
<u>b. LIFO</u>
LIFO stands for Last In Last Out
i. Cost of ending inventory
300 units × $14 = $4,200
650 units × $12 = $7,800
220 units × $15 = $3,300
Total = $15,300
ii. Cost of goods sold
300 units × $12 = $3,600
630 units × $15 = $9,450
Total = $13,050
<u>c. weighted average cost</u>
This method recalculates the unit costs after every purchase. Sales are valued at the latest unit costs calculated.
1st calculation : April 11
Unit Cost = Total Cost ÷ Total Number of Units
= ((950 units × $12) + (300 units × $14)) ÷ (1,250)
= $12.45
Sale = 300 × $12.45
= $3,735
2nd Calculation : June 1
Unit Cost = Total Cost ÷ Total Number of Units
= ((650 units × $12.45) + (850 units × $15)) ÷ (1,500)
= $13.90
Sale = 630 × $13.90
= $8,757
ii. Cost of goods sold
Total Cost of Goods Sold = $3,735 + $8,757
= $12,492
i. Cost of ending inventory
Ending Inventory = 870 × $13.90
= $12,093
