Cost Basis approach of Accounting in Valuation of Inventories. Beaver Company ha
ID: 2586357 • Letter: C
Question
Cost Basis approach of Accounting in Valuation of Inventories.
Beaver Company has the following transactions during the month of January: 3. Cost per unit Date Jan. 1 Jan. 5 Jan 10 Jan 17 Jan 20 Jan 25 Jan 28 Transactions Balance Purchase Sale Purchase Purchase Sale Sale Units 200 50 40 60 40 50 45 $ 22 24 25 The cost of the inventory at January 1 was $19 per unit under the Average cost method and $13 per unit and LIFO cost flow assumptions. Requirement: Compute inventory dollar amounts at the end of January and the Cost of Goods Sold for January for the following methods: Moving average (round unit costs to 4 decimal places) LIFO perpetual A. B.Explanation / Answer
Moving Average DATE Cost of goods available for sale Cost of Goods sold Closing inventory Units Rate Amount Units Rate Amount Units Rate Amount Beginning Inventory 200 19 3800 5-Jan 50 22 1100 200 19 3800 50 22 1100 Average Cost 250 19.6 4900 10-Jan 40 19.6 784 210 19.6 4116 17-Jan 60 24 1440 210 19.6 4116 60 24 1440 20-Jan 40 25 1000 210 19.6 4116 60 24 1440 40 25 1,000 Average Cost 310 21.1484 6556 25-Jan 50 21.1484 1057.42 260 21.1484 5498.58 28-Jan 45 21.1484 951.678 215 21.1484 4546.906 Total 135 2793.098 215 21.1484 4546.906 LIFO-Perpetual DATE Cost of goods available for sale Cost of Goods sold Closing inventory Units Rate Amount Units Rate Amount Units Rate Amount Beginning Inventory 200 19 3800 5-Jan 50 22 1100 200 19 3800 50 22 1100 10-Jan 40 22 880 200 19 3800 10 22 220 17-Jan 60 24 1440 200 19 3800 10 22 220 60 24 1440 20-Jan 40 25 1000 200 19 3800 10 22 220 60 24 1440 40 25 1000 25-Jan 40 25 1000 200 19 3800 10 24 240 10 22 220 50 24 1200 28-Jan 45 24 1080 200 19 3800 10 22 220 5 24 120 Total 135 3200 215 4140 Moving Average LIFO Cost of Goods Sold 2793.098 3200 Ending Inventory 4546.906 4140