Exercise 6-4 Elsa’s Boards sells a snowboard, Xpert, that is popular with snowbo
ID: 2533079 • Letter: E
Question
Exercise 6-4 Elsa’s Boards sells a snowboard, Xpert, that is popular with snowboard enthusiasts. Information relating to Elsa’s purchases of Xpert snowboards during September is shown below. During the same month, 317 Xpert snowboards were sold. Elsa’s uses a periodic inventory system. Date Explanation Units Unit Cost Total Cost Sept. 1 Inventory 68 $99 $ 6,732 Sept. 12 Purchases 118 103 12,154 Sept. 19 Purchases 52 109 5,668 Sept. 26 Purchases 131 105 13,755 Totals 369 $38,309 Compute the ending inventory at September 30 and cost of goods sold using the FIFO and LIFO methods. FIFO LIFO The ending inventory at September 30 $ $ Cost of goods sold $ $ LFor both FIFO and LIFO, calculate the sum of ending inventory and cost of goods sold. FIFO LIFO The sum of ending inventory and cost of goods sold $ $
Explanation / Answer
First of all let’s calculate number of units in ending inventory;
Beginning inventory
68 units
Add: Purchasee (118 + 52 + 131)
301 units
Total units available for sale
369 units
Less: Sale
(317) units
Ending inventory
52 units
Now let’s calculate value of ending inventory under FIFO and LIFO;
FIFO
LIFO
Ending inventory units
52
52
Per unit price for ending inventory
$105
$99
Value of ending inventory
$5460
$5148
Now let’s calculate value of COGS (Cost of goods sold) under FIFO and LIFO;
FIFO
LIFO
Total value of units available of goods sold
$38309
$38309
Less: Value of ending inventory
($5460)
($5148)
COGS (Cost of goods sold)
$32849
$33161
Now let’s calculate sum of COGS (Cost of goods sold) and ending inventory under FIFO and LIFO;
FIFO
LIFO
Value of ending inventory
$5460
$5148
COGS (Cost of goods sold)
$32849
$33161
Total
$38309
$38309
Beginning inventory
68 units
Add: Purchasee (118 + 52 + 131)
301 units
Total units available for sale
369 units
Less: Sale
(317) units
Ending inventory
52 units