Question

Ivanhoe Company sells a snowboard, EZslide, that is popular with snowboard enthusiasts. Below is information relating to Ivanhoe Company’s purchases of EZslide snowboards during September. During the same month, 105 EZslide snowboards were sold. Ivanhoe Company uses a periodic inventory system.
Date Explanation Units Unit Cost Total Cost
Sept. 1 Inventory 12 $106 $ 1,272
Sept. 12 Purchases 45 109 4,905
Sept. 19 Purchases 55 110 6,050
Sept. 26 Purchases 21 111 2,331
Totals 133 $14,558

(a) Compute the ending inventory at September 30 using the FIFO, LIFO and average-cost methods.
(b) Compute the cost of goods sold at September 30 using the FIFO, LIFO and average-cost methods.

Answer 1

Answer:

FIFO ending inventory at 30 September  :  $3101

LIFO ending inventory at  30  September $3016

Average-cost methods ending inventory at 30 September$ 3071.15

FIFO Cost OF Goods Sold    $ 11487

LIFO Cost OF Goods Sold    $ 11572

Average Cost Method Cost OF Goods Sold    $ 11516.85              

Explanation:

Working 1

Date                Explanation          Units             Unit Cost       Total Cost

Sept. 1                 Inventory              12                 $106               $ 1,272

Sept. 12                Purchases         45                   109                  4,905

Sept. 19                  Purchases        55                  110                    6,050

Sept. 26                   Purchases         21                111                    2,331

Totals                                                133                                       $14,558

$ 14588/133 units = $ 109.68 weighted average per unit

Sales       105 snowboards

FIFO ending inventory at 30 September  :  $3101

28  Snow boards in the ending inventory

21 from Sept. 26 Purchases at $111= $ 2331

7 from Sept. 19 Purchases at $ 110= $ 770

FIFO ending inventory at 30 September $ $3101

LIFO ending inventory at  30  September $3016

12 from 1 Sept.  Inventory  at $106 = $ 1272

16 from Sept. 12 Purchases at $109= $ 1744

Total Using LIFO= $ 3016

Average-cost methods ending inventory at 30 September$ 3071.15

28  Snow boards in the ending inventory at $ 109.68 weighted average per unit= $ 3071.15

Total Cost of 133 units available for Sale (from Working 1)  $14558

Less Ending Inventory FIFO   at 30 September  :  $3101

FIFO Cost OF Goods Sold    $ 11487            

Total Cost of 133 units available for Sale (from Working 1)  $14558

Less Ending Inventory LIFO   at 30 September  :  $3016

LIFO Cost OF Goods Sold    $ 11572

Total Cost of 133 units available for Sale (from Working 1)  $14558

Less Ending Inventory Average Cost Method  at 30 September  :  $3071.15

Average Cost Method Cost OF Goods Sold    $ 11516.85