Question

The Company uses a periodic inventory system. For specific identification, ending inventory consists of 215 units, where 190 are from the January 30 purchase, 5 are from the January 20 purchase, and 20 are from beginning inventory. Determine the cost assigned to ending inventory and to cost of goods sold using (a) specific identification, (b) weighted average, (c) FIFO, and (d) LIFO.

Answer 1

Ending inventory:

• (a) specific identification = $2,720
• (b) weighted average = $2,810.05
• (c) FIFO = $2,687.50
• (d) LIFO = $3,010

Cost of goods sold:

• (a) specific identification = $6,495
• (b) weighted average = $6,404.95
• (c) FIFO = $6,527.50
• (d) LIFO = $6,205

Step-by-step explanation:

Date Activity Units Cost Total

Jan. 1 Beg. inventory 215 $14 $3,010

Jan. 10 Sales 165

Jan. 20 Purchase 160 $13 $2,080

Jan. 25 Sales 190

Jan. 30 Purchase 330 $12.50 $4,125

total Purchases 705 $13.07 $9,215

Ending inventory:

(a) specific identification = (190 x $12.50) + (5 x $13) + (20 x $14) = $2,720

(b) weighted average = 215 x $13.07 = $2,810.05

(c) FIFO = 215 x $12.50 = $2,687.50

(d) LIFO = 215 x $14 = $3,010

Cost of goods sold:

(a) specific identification = $9,215 - $2,720 = $6,495

(b) weighted average = $9,215 - $2,810.05 = $6,404.95

(c) FIFO = $9,215 - $2,687.50 = $6,527.50

(d) LIFO = $9,215 - $3,010 = $6,205