Exercise 6-16 (Part Level Submission) Sheffield Appliance uses a perpetual inven
ID: 340944 • Letter: E
Question
Exercise 6-16 (Part Level Submission) Sheffield Appliance uses a perpetual inventory system. For its flat-screen television sets, the January 1 inventory was 3 sets at $650 each. On January 10, Sheffield purchased 7 units at $670 each. The company sold 2 units on January 8 and 4 units on January (a) ] Your answer is correct. Compute the ending inventory under FIFO. (Round answer to 0 decimal places, e.g. 1,250.) FIFO The ending inventory 20) SHOW SOLUTION SHOW ANSWER LINK TO TEXT Attempts: 3 of 3 used
Explanation / Answer
Answer
Ending Inventory = Total value of goods available for sales - COGS
Total value of goods available for sales = (3 * $650) + (7 * $670) = $6,640
(1) Ending Inventory under FIFO
(2) Ending Inventory under LIFO
(3) Ending Inventory under Weighted Average cost
Average unit cost on different dates
COGS = (2 * $650) + (4 * $667.50) = $1,300 + $2,670 = $3,970
Ending Inventory = $6,640 - $3,970 = $2,670