Question

g Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31. Transactions Units Unit Cost Beginning inventory, January 1 3,400 $ 50 Transactions during the year: a. Purchase, January 30 4,700 65 b. Sale, March 14 ($100 each) (3,050 ) c. Purchase, May 1 3,400 80 d. Sale, August 31 ($100 each) (3,500 )

Answer 1

W/A

COGS $ 425,750

EI $ 321.750‬

FIFO

COGS: $ 374,750

EI $ 371,750‬

LIFO

COGS $ 476,750

EI $ 270,750‬

Step-by-step explanation:

Date Units Cost Subtotal

Begining3,400 50.00 170,000

Jan 30th 4,700 65.00 305,500

May 1st 3,400 80.00 272,000

Total 11,500 747,500

Sales units: 3,050 + 3,500 = 6,550

Weighted Average:

$747,5000 total value of the inventory / 11,500 units available = $65

COGS: 6,550 x $65 = $ 425,750‬

Ending Inventory: 747,500 - 425,750 = 321.750‬

FIFO

We sale the first units so the COGS are the frist 6,550 untis starting from the top:

3,400 beginning at 50

+ 3,150 Jan 30th at 65

COGS: 374,750

EI 747,500 - 375,750 = 371,750‬

LIFO we made sales of the lattest untis so in this case we start from the bottom:

3,400 May 1st at $80

3,150 Jan 30th at $65

COGS 476,750

EI 747,500 - 476,750 = 270.750‬