I.Use the following to answer the question(s) below: Shown below is the activity
ID: 2545514 • Letter: I
Question
I.Use the following to answer the question(s) below: Shown below is the activity for one of the products of Random Creations $4,000 January 1 balance, 80 units a S50 Purchases: January 18: 40 units @$51 January 28:40 units a S52 Sales: January 12: 30 units January 22: 30 units January 31:45 units Show your computation 1) Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Random Creations uses LIFO and perpetual inventory system. 2) Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Random Creations uses LIFO and a periodic inventory system. 3) Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Random Creations uses average cost and a periodic inventory system. 4) Required: Compute the January 31 ending inventory and cost of goods sold for January, assuming Random Creations uses average cost and a perpetual inventory system.Explanation / Answer
COST OF GOODS AVAILABLE FOR SALE: Date Units Rate Total Cost Jan-01 80 50 4000 Jan-18 40 51 2040 Jan-28 40 52 2080 160 8120 SALE: Jan-12 30 Jan-22 30 Jan-31 45 105 Balance Units 55 ANSWERS: 1) Cost of goods sold = 30*50+30*51+40*52+5*51 = $ 5,365 Ending inventory = 8120-5365 = $ 2,755 2) Cost of goods sold = 40*52+40*51+25*50= $ 5,370 Ending inventory = 8120-5370 = $ 2,750 3) Cost of goods sold = 105*8120/160 = $ 5,329 Ending inventory = 55*8120/160 $ 2,791 4) Cost of goods sold: Jan-12 30*50 = $ 1,500 Jan-22 Average rate = (50*50+40*51)/(50+40) =50.44 Cost of goods sold = 30*50.44 = $ 1,513 Jan-28 Cost of goods sold = 45*50.44 = $ 2,270 Cost of goods sold $ 5,283 Ending inventory = 15*50.44+40*52 = $ 2,837