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 | |