Question

Eneri Company's inventory records show the following data: Units Unit Cost Inventory, January 1 10000 $9.20 Purchases: June 18 9000 8.00 November 8 6000 7.00 A physical inventory on December 31 shows 4000 units on hand. Eneri sells the units for $13 each. The company has an effective tax rate of 20%. Eneri uses the periodic inventory method. What is the cost of goods available for sale?

Answer 1

$206,000

Step-by-step explanation:

Units Unit Cost Total Inventory January 1 10,000 $9.20 $92,000

Purchases: June 18 9,000 $8.00 $72,000

Purchase: November 8 6,000 $7.00 $42,000

total 25,000 $8.24 $206,000

When using a periodic inventory system, the cost of goods available for sale is the sum of the beginning inventory plus all the purchases.

A physical inventory on December 31 shows 4000 units on hand.

ending inventory valuation using:

• weighted average = 4,000 units x $8.24 = $32,960
• LIFO = 4,000 units x $9.20 = $36,800
• FIFO = 4,000 units x $7 = $28,000

cost of goods sold using:

• weighted average = $206,000 - $32,960 = $173,040
• LIFO = $206,000 - $36,800 = $169,200
• FIFO = $206,000 - $28,000 = $178,000

Answer 2

$206,000

Step-by-step explanation:

Beginning inventory 10,000*9.2 $92,000

Purchases during the month (9000*8+ 6000*7) $114,000

Cost of Goods available for sale $206,000