Question

Wolfe Company had the following beginning inventory and purchases during 2018 Date Transaction Number of units Unit Cost 1/1 Beginning inventory 2,000 $22.00 4/12 Purchase No. 1 2,300 $26.00 7/11 Purchase No. 2 800 $28.00 10/5 Purchase No. 3 1,250 $30.00 Wolfe sold 4,100 units Determine the amount of ending inventory and cost of goods sold using the following methods: Method Ending inventory Cost of Goods Sold LIFO FIFO Weighted average

Answer 1

Wolfe Company

The amount of:

LIFO FIFO Weighted Average

Ending inventory $50,500 $65,100 $58,005

Cost of goods sold $113,200 $98,600 $105,698

Step-by-step explanation:

a) Data and Calculations:

Date Transaction Number of units Unit Cost Cost Value

1/1 Beginning inventory 2,000 $22.00 $44,000

4/12 Purchase No. 1 2,300 $26.00 59,800

7/11 Purchase No. 2 800 $28.00 22,400

10/5 Purchase No. 3 1,250 $30.00 37,500

Total inventory available 6,350 $163,700

Wolfe sold 4,100

Ending Inventory 2,250

LIFO

Ending Inventory = $50,500 (250 * $26 + 2,000 * $22)

Cost of goods sold:

4/12 Purchase No. 1 2,050 $26.00 53,300

7/11 Purchase No. 2 800 $28.00 22,400

10/5 Purchase No. 3 1,250 $30.00 37,500

Total cost of goods sold = 4,100 $113,200

FIFO:

Ending Inventory = Cost of goods available for sale - Cost of goods sold

= $65,100 ($163,700 - $98,600)

Cost of goods sold:

1/1 Beginning inventory 2,000 $22.00 $44,000

4/12 Purchase No. 1 2,100 $26.00 54,600

Total cost of goods sold = $98,600

Weighted average:

Weighted average cost = $25.78 ($163,700/6,350)

Ending inventory = $58,005 (2,250 * $25.78)

Cost of goods sold = $105,698 (4,100 * $25.78)