Question

Spotter Corporation reported the following for June in its periodic inventory records. Date Description Units Unit Cost Total Cost June 1 Beginning 20 $ 10.00 $ 200.00 11 Purchase 30 11.00 330.00 24 Purchase 30 13.00 390.00 30 Ending 34 Required: Calculate the cost of ending inventory and the cost of goods sold under the (a) FIFO, (b) LIFO, and (c) weighted average cost methods. (Do not round your intermediate calculations. Round "Weighted Average Cost" to 2 decimal places.)

Answer 1

Answer:

(a) FIFO

cost of ending inventory = $442.00

cost of goods sold = $486.00

(b) LIFO

cost of ending inventory = $354.00

cost of goods sold = $566.00

(c) weighted average cost

cost of ending inventory = $391.00

cost of goods sold = $529.00

Explanation:

(a) FIFO

cost of ending inventory

cost of ending inventory  = Number of Units left × Earliest Price

                                          = 34 × $13.00

                                          = $442.00

cost of goods sold (46 units sold during the year)

cost of goods sold  : 20 units × $10 = $200

                                  26 units × $11  = $286

                                  Total                 = $486

(b) LIFO

cost of ending inventory

cost of ending inventory : 20 units × $10 = $200

                                           14 units  × $11  = $154

                                           Total                = $354

cost of goods sold (46 units sold during the year)

cost of goods sold :    30 units × $13 = $390

                                     16 units × $11  = $176

                                    Total                 = $566

(c) weighted average cost

cost of ending inventory

cost of ending inventory  = Number of Units left × Average price

New Average Price = ((20 units × $10) + (30 units × $11)) / 50 units

                                 = $10.60

New Average Price = ((50 units × $10.60) + (30 units × $13)) / 80 units

                                 = $11.50

cost of ending inventory  = 34 units × $11.50

                                          = $391.00

cost of goods sold (46 units sold during the year)

cost of goods sold  = Number of Units Sold × Average price

                                = 46 units × $11.50

                                = $529.00

c