The following sales and purchases of the same product were made during 20x1 at Y
ID: 2540101 • Letter: T
Question
The following sales and purchases of the same product were made during 20x1 at Yang Corporation. The opening inventory consisted of 50 units at $2 each Purchases Date March 15 June 15 ales Date April 25 250 une 30 500 nits S per unit UnitsUnit $Price Total 200 for specific identfication, sold 50 units of opening inventory and 200 units of March 15 purchase *for specific identification, sold 500 units of June 15 purchase Requirements: 1. Calculate cost of goods sold and the cost of ending inventory under FIFO, LIFO, specific identification, and weighted average inventory cost flow assumptions. Use the student template #1 2. Prepare calculations comparing the effect on profit of the three inventory cost flow assumptions.Explanation / Answer
As closing stoc is sam for every method so profits will also be same for every method
WEIGHTED AVERAGE METHOD Goods Purchased Cost of Goods Sold Ending Inventory Date of transaction Activity units unit cost units sold unit cost COG$ Endinginventory
unit Cost per
Unit Ending
inventory
cost 01-03-20x1 Beginning inventory 50 2 50 2 100 15-03-20x1 Purchases 200 3 50 2 100 200 3 600 Average 250 2.8 700 25-04-20x1 Sales 250 2.8 700 15-06-20x1 Purchases 600 5 600 5 3000 Average 600 5 3000 30-06-20x1 sales 500 5 2500 100 5 500 closing 100 5 500 sales 4250 Purchases 3600 Opening Stock 100 closing stock 500 Profit 1050