| Cost flow assumptions—FIFO, LIFO, and weighted average using a |
| periodic system The following data are available for Sellco for the fiscal year |
| ended on January 31, 2014: |
| | Units | Unit Price | $ | |
| Sales | 3,200 | | | |
| Beginning Inventory | 1,000 | $4.00 | $4,000 | |
| Purchases -in date order | 1,200 | $5.00 | $6,000 | |
| 1,600 | $6.00 | $9,600 | |
| 800 | $8.00 | $6,400 | |
| Required: |
| a. Calculate cost of goods sold and ending inventory under the following cost flow |
| assumptions (using a periodic inventory system): |
| 1. FIFO. |
| | Units | Unit Price | $ | $ |
| Beginning Inventory | 1,000 | $4.00 | | $4,000 |
| Purchases | |
| | 1,200 | $5.00 | $6,000 | |
| 1,600 | $6.00 | $9,600 |
| 800 | $8.00 | $6,400 | $22,000 |
| Available | 4,600 | | | $26,000 |
| Ending Inventory (1,000 +3,600 less 3,200) = 1,400 | | |
| | | |
| | | | $0 |
| CGS | | |
| 2. LIFO |
| | Units | Unit Price | $ | $ |
| Beginning Inventory | 1,000 | $4.00 | | $4,000 |
| Purchases | |
| | 1,200 | $5.00 | $6,000 | |
| 1,600 | $6.00 | $9,600 |
| 800 | $8.00 | $6,400 | $22,000 |
| Available | 4,600 | | | $26,000 |
| Ending Inventory (1,000 +3,600 less 3,200) = 1,400 | | |
| | | |
| | | | $0 |
| CGS | | |
| 3. Weighted average. Round the unit cost answer to two decimal places and |
| ending inventory to the nearest $10. |
| Beginning Inventory | 1,000 | $4.00 | | $4,000 |
| Purchases | |
| | 1,200 | $5.00 | $6,000 | |
| 1,600 | $6.00 | $9,600 |
| 800 | $8.00 | $6,400 | $22,000 |
| Available | 4,600 | | | $26,000 |
| Weighted Average | | | |
| Cost of Goods sold-3,200 units | |
| Ending Inventory | | |
| b. Assume that net income using the weighted-average cost flow assumption is |
| $116,000. Calculate net income under FIFO and LIFO. |
| Weighted Average proof |
| Income | | |
| CGS | |
| Sales value | |
| FIFO Income |
| Sales | | |
| CGS | |
| Net Income | |
| LIFO Incme |
| Sales | | |
| CGS | |
| Net Income | |
Crazy0536
10 years ago
3
0
