Question

Calculate the cost of ending inventory and cost of goods sold using the periodic FIFO, LIFO, and weighted average cost methods.

Answer 1

To calculate the cost of ending inventory and cost of goods sold using the periodic FIFO, LIFO, and weighted average cost methods, follow these steps...

Step-by-step explanation:

FIFO method:

1. Sort the purchases in chronological order.
2. Calculate the cost of goods sold by multiplying the unit cost of each item sold by the quantity sold.
3. Calculate the ending inventory by multiplying the unit cost of each item on hand by the quantity on hand.

LIFO method:

1. Sort the purchases in reverse chronological order.
2. Calculate the cost of goods sold by multiplying the unit cost of each item sold by the quantity sold.
3. Calculate the ending inventory by multiplying the unit cost of each item on hand by the quantity on hand.

Weighted average cost method:

1. Calculate the total cost of the goods available for sale by summing up the cost of purchases.
2. Calculate the weighted average unit cost by dividing the total cost by the total quantity of goods available for sale.
3. Calculate the cost of goods sold by multiplying the unit cost by the quantity sold.
4. Calculate the ending inventory by multiplying the unit cost by the quantity on hand.