Question

Jessica’s Office Supply, Inc., had 300 calculators on hand at January 1, 2017, costing $16 each. Purchases and sales of calculators during the month of January were as follows: Date Purchases Sales January 12 200 @ $25 14 150 @ $17 29 100 @ $18 30 150 @ $30 Jessica does not maintain perpetual inventory records. According to a physical count, 200 calculators were on hand at January 31, 2017. Required: What is the amount of ending inventory at January 31, 2017, and cost of goods sold for the month ended January 31, 2017, under the FIFO method? What is the amount of ending inventory at January 31, 2017, and cost of goods sold for the month ended January 31, 2017, under the LIFO method? What is the amount of ending inventory at January 31, 2017, and cost of goods sold for the month ended January 31, 2017, under the average cost method?

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Jessica’s Office Supply, Inc., had 300 calculators on hand on January 1, 2017, costing $16 each.

Purchases and sales of calculators during January were as follows:

January 12: 200 units for $25

J 14: 150 for $17

J 29: 100 for $18

J 30: 150 for $30

According to a physical count, 200 calculators were on hand on January 31, 2017.

FIFO:

Inventory= 150*30 + 50*18= $5,400

COGS= 300*16 + 200*25 + 150*17 + 50*18= $13,250

LIFO:

Inventory= 200*16= $3,200

COGS= 150*30 + 100*18 + 150*17 + 200*25 + 100*16= 15,450

Average cost method:

Average cost= (16 + 25 + 17 + 18 + 30)/5= 21.2

Inventory= 21.2*200= $4,240

COGS= 21.2* 700= $14,840