Accounting Principles
The AT Corporation made some transactions of inventory during the month of September.
Total number of units available for sale during the month is the sum of the units at opening inventory and units purchased during the month which is as under:
During the month 4,000 units and 4,000 units have been purchased on 16th September and 25th September. The opening inventory of the month of September is 5,000 units.
Total number of units sold during the month is as under:
During the month 2,000 units and 5,000 units have been sold on 6th September and 20th September.
1.
The cost of ending inventory and cost of goods sold for the month using periodic inventory system under each of the following cost flow methods is as under:
a.
Average …show more content…
The cost of ending inventory of 6,000 units at the average rate of $3.55 is as under:
The cost of ending inventory of 6,000 units on the basis of average cost method is $21,300.
b.
First-in, first-out (FIFO): under FIFO the goods available for sale is sold first. The cost of goods sold of 7,000 units is calculated as under:
5,000 units will be valued at the rate of $3.23 and the remaining 2,000 will be valued at the rate of $3.50 from the lot purchased on 16th September.
The cost of goods sold under FIFO is $23,150.
The cost of ending inventory of 6,000 units will be valued at the rate of purchases made at the last of the month.
The 4,000 units will be valued at the rate of $4.00 which has been purchased on 25th September and remaining 2,000 units will be valued at the rate of $3.50 which has been purchased on 16th September.
The cost of ending inventory under FIFO is $23,000.
c.
Last-in, first-out (FIFO): under LIFO the goods purchased last is sold first. The cost of goods sold of 7,000 units is calculated as …show more content…
The cost of goods sold under LIFO is $23,000.
The cost of ending inventory of 6,000 units will be valued as under:
The 5,000 units will be valued at the rate of $3.23 (out of the beginning inventory) and remaining 1,000 units will be valued at the rate of $3.50 which has been purchased on 16th September.
The cost of ending inventory under LIFO is
Total number of units available for sale during the month is the sum of the units at opening inventory and units purchased during the month which is as under:
During the month 4,000 units and 4,000 units have been purchased on 16th September and 25th September. The opening inventory of the month of September is 5,000 units.
Total number of units sold during the month is as under:
During the month 2,000 units and 5,000 units have been sold on 6th September and 20th September.
1.
The cost of ending inventory and cost of goods sold for the month using periodic inventory system under each of the following cost flow methods is as under:
a.
Average …show more content…
The cost of ending inventory of 6,000 units at the average rate of $3.55 is as under:
The cost of ending inventory of 6,000 units on the basis of average cost method is $21,300.
b.
First-in, first-out (FIFO): under FIFO the goods available for sale is sold first. The cost of goods sold of 7,000 units is calculated as under:
5,000 units will be valued at the rate of $3.23 and the remaining 2,000 will be valued at the rate of $3.50 from the lot purchased on 16th September.
The cost of goods sold under FIFO is $23,150.
The cost of ending inventory of 6,000 units will be valued at the rate of purchases made at the last of the month.
The 4,000 units will be valued at the rate of $4.00 which has been purchased on 25th September and remaining 2,000 units will be valued at the rate of $3.50 which has been purchased on 16th September.
The cost of ending inventory under FIFO is $23,000.
c.
Last-in, first-out (FIFO): under LIFO the goods purchased last is sold first. The cost of goods sold of 7,000 units is calculated as …show more content…
The cost of goods sold under LIFO is $23,000.
The cost of ending inventory of 6,000 units will be valued as under:
The 5,000 units will be valued at the rate of $3.23 (out of the beginning inventory) and remaining 1,000 units will be valued at the rate of $3.50 which has been purchased on 16th September.
The cost of ending inventory under LIFO is