Answered

Welcome to Westonci.ca, your one-stop destination for finding answers to all your questions. Join our expert community now! Discover solutions to your questions from experienced professionals across multiple fields on our comprehensive Q&A platform. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.

The units of an item available for sale during the year were as follows:
Jan. 1 Inventory 1,000 units at $120
Feb. 17 Purchases 1,375 units at $128
July 21 Purchases 1,500 units at $136
Nov. 23 Purchases 1,125 units at $140
There are 1,200 units of the item in the physical inventory at December 31. The Inventony periodic inventory system is used.
a. Determine the inventory cost by the first-in, first-out method.
b. Determine the inventory cost by the last-in, first-out method.
c. Determine the inventory cost by the weighted average cost method.

Sagot :

anthougo

Answer:

                             FIFO            LIFO              Weighted Average

Inventory cost =  $167,700      $145,600     $157,800

Explanation:

a) Data and Calculations:

Jan. 1       Inventory     1,000 units at $120  $120,000     $120,000

Feb. 17    Purchases    1,375 units at $128     176,000      296,000

July 21    Purchases    1,500 units at $136    204,000      500,000

Nov. 23  Purchases     1,125 units at $140     157,500      657,500

Dec. 31   Total units   5,000                        $657,500

Dec. 31   Inventory      1,200

Dec. 31   Units sold    3,800

Inventory cost by:

FIFO ( first-in, first-out method)

July 21    Purchases         75 units at $136  $10,200

Nov. 23  Purchases     1,125 units at $140   157,500

Dec. 31   Inventory      1,200                       $167,700

LIFO (last-in, first-out method)

Jan. 1       Inventory     1,000 units at $120   $120,000

Feb. 17    Purchases      200 units at $128      25,600

Dec. 31   Inventory      1,200                       $145,600

Weighted-Average Cost Method

Total cost of goods available/Total units available  for sale

= $657,500/5,000

= $131.50 per unit

Inventory cost = $157,800 ($131.50 * 1,200)

Thanks for using our service. We aim to provide the most accurate answers for all your queries. Visit us again for more insights. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. We're glad you chose Westonci.ca. Revisit us for updated answers from our knowledgeable team.