Problem 5 The following unts are available for sale during the year: January 1,
ID: 2372404 • Letter: P
Question
Problem 5
The following unts are available for sale during the year:
January 1, 2011
Beginning inventory
10 units @ $ 18
April 3, 2011
Purchases
30 units @ $ 20
August 31, 2011
Purchases
28 units @ $ 25
September 29, 2011
Purchases
17 unints @ $ 30
December 31, 2011
Ending inventory
21 units
Detemine ending inventory cost by (a) Fifo, (b) Lifo, and (c) Average Cost. If the selling price per unit is $ 35, determine the Total Revenue, Gross Profit and Cost of Goods sole under (a) Fifo, (b) Lifo and(c) Average . The ending inventory as indicated above was 21 units. Use the format below for your answers
Ending Inventory
FIFO
LIFO
Average
FIFO
LIFO
AVERAGE
Total Revenue
Cost of Goods Sold
Gross Profit
Problem 5
The following unts are available for sale during the year:
January 1, 2011
Beginning inventory
10 units @ $ 18
April 3, 2011
Purchases
30 units @ $ 20
August 31, 2011
Purchases
28 units @ $ 25
September 29, 2011
Purchases
17 unints @ $ 30
December 31, 2011
Ending inventory
21 units
Detemine ending inventory cost by (a) Fifo, (b) Lifo, and (c) Average Cost. If the selling price per unit is $ 35, determine the Total Revenue, Gross Profit and Cost of Goods sole under (a) Fifo, (b) Lifo and(c) Average . The ending inventory as indicated above was 21 units. Use the format below for your answers
Ending Inventory
FIFO
LIFO
Average
FIFO
LIFO
AVERAGE
Total Revenue
Cost of Goods Sold
Gross Profit
Problem 5
The following unts are available for sale during the year:
January 1, 2011
Beginning inventory
10 units @ $ 18
April 3, 2011
Purchases
30 units @ $ 20
August 31, 2011
Purchases
28 units @ $ 25
September 29, 2011
Purchases
17 unints @ $ 30
December 31, 2011
Ending inventory
21 units
Detemine ending inventory cost by (a) Fifo, (b) Lifo, and (c) Average Cost. If the selling price per unit is $ 35, determine the Total Revenue, Gross Profit and Cost of Goods sole under (a) Fifo, (b) Lifo and(c) Average . The ending inventory as indicated above was 21 units. Use the format below for your answers
Ending Inventory
FIFO
LIFO
Average
FIFO
LIFO
AVERAGE
Total Revenue
Cost of Goods Sold
Gross Profit
Problem 5
The following unts are available for sale during the year:
January 1, 2011
Beginning inventory
10 units @ $ 18
April 3, 2011
Purchases
30 units @ $ 20
August 31, 2011
Purchases
28 units @ $ 25
September 29, 2011
Purchases
17 unints @ $ 30
December 31, 2011
Ending inventory
21 units
Explanation / Answer
Under Periodic Inventory
FIFO
Total revenue= 64 units sold x $35 = $2,240
COGS (64 units) = 10 x $18 + 30 x $20 + 24 x $25
COGS = $1,380
Gross profit = $860
Ending Inventory = 4 x $25 + 17 x $30 = $610
LIFO
Total Revenue = $2,240 (its the same under every method)
COGS = 17 x $30 + 28 x $25 + 19 x $20
COGS = $1,590
Gross profit = $650
Ending inventory = 10 x $18 + 11 x $20 = $400
Average cost
Total units: 85
Total cost of inventory: $1,990
Average cost per unit= $1,990 / 85 = 23.41 (rounded)
Total revenue = $2,240
COGS = 64 x $23.41 = $1,498.24
Gross profit = $741.76
Ending inventory = 21 x $23.41 = $491.61