Chapter 7 HW ? ?G) ezto.mheducation.com/hmtpx Gladstone Company tracks the numbe

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Chapter 7 HW ? ?G) ezto.mheducation.com/hmtpx Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory Assume its accounting records provided the following information at the end of the annual accounting costing method at the end of each period, as if it uses a periodic inventory system. period, December 31 Beginning inventory, January 1 Transactions during the year a Purchase, January 30 b. Sale, March 14 ($100 each) C. Purchase, May 1 d. Sale, August 31 ($100 each) 1,500 $60 2,600 1,300 90 72 Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30 Assume that the sale of August 31 was selected from the remainder of the beginning inventory. with the balance from the purchase of May Required: 1L Compute the amount of goods available for sale, ending inventory and cost of goods sold at December 31 under each of the following inventory costing methods (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Amount of Goods Available for Sale Ending InventoryCost of Goods Sold a Last-in, first-out b Weighted average cost c First-in, first-out d. Specific identification acer 0 8

Explanation / Answer

Cost of goods available for sale :[1500*60]+[2600*72]+[1300*90]

          = 90000+ 187200+ 117000

         = 394200

Unita available for sale : 1500+2600+1300 = 5400

Average cost per unit : 394200/5400= $ 73 per unit

Unit sold = 1150+1600= 2750

ending inventory =units available for sale -unit sold

          = 5400 -2750

            = 2650

Under FIFO units acquired first are sold so ending inventory is left from last purchase

under LIFO units acquired last are sold first so ending inventory is left from beginning inventory

[1500*60]+[1150*72]

172800

394200-172800= 221400

[1300*90]+[1350*72]

214200

[(1500*2/5*60)+(2600*3/5*72]march 14sale +[(900*60)+(700*90)]aug 31 sale

265320

394200-265320

128880

**SPECific identifiaction: Units left from beginning inventory after first sale : 1500-[1500*2/5]= 1500-600=900

Amounts of goods available for sale[A] Ending inventory [B] cost of goods sold [A-B] LIFO 394200

[1500*60]+[1150*72]

172800

394200-172800= 221400

Weighted average 394200 2650*73=193450 394200-193450=200750 FIFO 394200

[1300*90]+[1350*72]

214200

394200-214200=180000 Specific identification 394200

[(1500*2/5*60)+(2600*3/5*72]march 14sale +[(900*60)+(700*90)]aug 31 sale

265320

394200-265320

128880

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