The college campus bookstore uses a periodic inventory system. The bookstore pur
ID: 2521656 • Letter: T
Question
The college campus bookstore uses a periodic inventory system. The bookstore purchases 405 copies of a textbook at $60 each in June, 970 copies in August at $62 each, and 630 copies in December at $65 each The bookstore sold 1,855 copies of the textbook during the year. Required: Calculate the company's ending inventory and cost of goods sold using the each of following inventory costing methods. a. FIFO Cost of Goods Sold Ending Inventory b. LIFO Cost of Goods Sold Ending Inventory c. Weighted Average cost method. (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.) Cost of Goods Sold Ending InventoryExplanation / Answer
a) FIFO:
Ending Inventory (copies) = 405+970+630 - 1855 = 2005 - 1855 = 150 copies
Ending Inventory cost = 150*65 = 9750
Cost of goods sold = Cost of units in beginning inventory + Cost of units purchased during the period – Cost of units in ending inventory
= 405*60 + 970*62 + 630*65 - 150*65 = 24300 + 60140 + 40950 - 9750 = 115640
b) LIFO:
Ending Inventory cost = 150*60 = 9000
Cost of goods sold = 405*60 + 970*62 + 630*65 - 150*60 = 24300 + 60140 + 40950 - 9000 = 116390
c) Weighted Average cost method:
Weighted average cost = Total purchase cost ÷ Number of units = (24300 + 60140 + 40950) /(405 + 670 + 930) = 125390/2005 = 62.54
Ending Inventory = 150*62.54 = 9381
Cost of goods sold = 405*60 + 970*62 + 630*65 - 150*62.54 = 24300 + 60140 + 40950 - 9381 = 116009